Dollar Holds Near 2-Month High as Rate Hikes and Middle East Tensions Weigh

The US dollar has been holding near its strongest level in two months as investors weigh the prospects of interest rate hikes and the diplomatic efforts to end the Middle East war. The euro is at $1.1446, loitering near its weakest level since late July, while sterling buys $1.3337.

The recent barrage of rate hikes from major central banks has taken centre stage in currency markets, with investors anticipating further tightening from central banks. Federal Reserve officials have flagged the possibility of more hikes if inflation does not ease, citing the need for higher interest rates to combat rising oil prices and inflation worries.

Brent crude futures are at $99.22 per barrel on hopes that diplomacy at the UN General Assembly could pave the way for a resolution to the Middle East war. However, investors remain cautious, with oil markets remaining in the spotlight due to the ongoing conflict and its impact on global economies.