Dollar Holds Steady Amid Middle East Energy Fears

The US dollar held steady near its highest levels of the past week, while the yen slipped for a second day as renewed fears of energy supply disruptions in the Middle East pushed up bond yields and oil prices.

Energy prices extended gains into a sixth day, with Brent crude rising 1.2% to $108.96 a barrel as trading resumed in Asia. This followed the release of data showing US producer prices increased 0.4% in August, meeting market expectations as energy prices rebounded during the month.

Tony Sycamore, market analyst at IG in Sydney, said 'The safe-haven U.S. dollar gained on risk-aversion flows, helped by higher energy prices that have lifted the chance of a Fed hike next week to 70%.'

The Australian dollar was flat at $0.7160, while its kiwi counterpart was up 0.1% at $0.5805. The euro and British pound were level against the dollar at $1.1613 and $1.3510, respectively.