Dollar Holds Near Two-Month High Amid Rate Hike Expectations and Diplomatic Efforts

The US dollar has stabilized near its two-month high as investors weigh the likelihood of interest rate hikes and diplomatic efforts to end the Middle East war.

Oil prices have eased on hopes for a breakthrough, but the path forward remains unclear, according to currency analysts.

The euro is trading at $1.1446, close to its weakest level since late July, while sterling buys $1.3337.

Federal Reserve officials have hinted at further rate hikes if inflation does not ease, and investors are anticipating tightening from central banks.

Currency analysts warn that the dollar's support from rates is durable but needs data confirmation, as futures already price more tightening than the Fed's projections.