Dollar Steadies Near Two-Month High Amid Rate Hike Prospects and Middle East Diplomacy

The US dollar held steady near its strongest level in two months on Wednesday, as investors weighed prospects of interest rate hikes and diplomatic efforts to end the Middle East war.

The euro was trading at $1.1446 in early markets, close to its weakest level since late July, while sterling bought $1.3337.

Central banks' recent barrage of rate hikes and hawkish rhetoric has taken centre stage in currency markets, with investors anticipating further tightening from major central banks, including the Federal Reserve.

Federal Reserve officials have flagged the possibility of more hikes if inflation does not ease, while US President Donald Trump warned that he could annihilate Iran if there is no deal to end the war.

Brent crude futures were trading 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 conflict.