Dollar Soars to Near Two-Week High as Middle East Tensions Drive Oil Prices Up

The US dollar held steady at nearly two-week highs on Wednesday as rising tensions in the Middle East pushed up oil prices and fueled inflation concerns, boosting bond yields.

The dollar index, which tracks the greenback against a basket of currencies including the yen and euro, rose 0.11% to 99.79, its highest level since August 17.

Federal Reserve rate hike expectations are growing, with markets now pricing in a 68% chance of a September increase, up from around 40% a week earlier, according to CME Group's FedWatch tool.

The euro was down 0.13% at $1.1577, while the yen weakened 0.08% against the greenback to 160.28 per dollar, its lowest level since July 31.