The Federal Reserve's interest rate decision meeting is approaching, and options traders are more bullish on the US dollar than ever before in the past month.

Affected by the tense geopolitical situation in the Middle East and the market sentiment leading up to the next week's Federal Reserve policy decision, the bullish sentiment for the US dollar options has increased. The rise in oil prices dragged down US bond yields, and the dollar is expected to post its best single week performance in a month. Interest rate swap pricing shows that there is a 37% probability of the Federal Reserve raising rates by 25 basis points at its next meeting. The hawkish policy expectations and interest rate differentials are driving bullish bets on US dollar options, with a one-period risk reversal indicator rising to 27 basis points, marking the highest bullish level in nearly a month.