The US dollar has recovered and is trading stronger against other major currencies after a sharp dip on Monday following news about the drone attacks on Saudi oil facilities. At the time of writing, the US dollar index DXY is trading at around 98.62.

The dollar climbed higher on Monday after the US President Donald Trump approved the use of emergency crude reserves to offset the disruption in supply from the attacked crude processing facilities in Saudi Arabia. This helped improve the market sentiment, sending safe havens lower and the US dollar up again.

The strengthening in the greenback could also be due to traders exiting bearish positions in the currency ahead of the upcoming Fed meeting. Markets are widely expecting the Fed to announce a 0.25% rate cut and will possibly enter new trading positions after the Federal Reserve makes a formal announcement regarding this. ‘