Dollar firm after Fed holds rates as Iran tensions keep FX volatile

The dollar remained firm on Wednesday after the Federal Reserve held interest rates steady and said inflation remains elevated.

The Fed left the federal funds target range at 3.5% to 3.75% and said Middle East developments are adding uncertainty to the outlook. Market coverage said the decision reinforced expectations that U.S. rates could stay higher for longer.

That has kept pressure on the yen, which has been weakened further by the surge in oil prices tied to Iran-related tensions. Reuters and Bloomberg reported that the dollar strengthened while traders watched the yen closely for signs of intervention risk.

ECB reference rates published on April 29 also show the yen still weak against the euro, with EUR/JPY at 186.71. The broader FX picture suggests traders are balancing central-bank policy against geopolitical risk.

For now, the main market theme is simple: a hawkish Fed hold, higher energy prices and renewed geopolitical stress are all supporting the dollar and keeping currency markets volatile.