Muscat: The dollar held near its highest level in a week today as markets weighed conflicting signals from the Middle East, where ongoing hostilities reignited energy supply fears while reports of US-Iran mediation efforts revived hopes of de-escalation. The dollar was little changed against the yen at 162.50 yen. The euro held steady at $1.1415, while sterling was flat at $1.3434 after new Prime Minister Andy Burnham pledged to adhere to fiscal rules.

According to Oman News Agency, the dollar index, tracking the US currency against a basket of six major peers, steadied at 100.96, close to its strongest level since 15 July. Markets remain hostage to Middle East tensions, with oil prices swinging sharply near six-week highs. US Treasury yields climbed again as traders assessed whether the renewed oil price rally - driven by the expanding war with Iran - would eventually feed into consumer prices. The benchmark 10-year yield traded at 4.5937 percent, while 30-year yields remained well above the 5 percent mark.

The New Zealand dollar rose 0.4 percent to $0.5860, its highest since early June, after strong inflation data reinforced expectations of another rate hike. The Australian dollar edged up to $0.7001. The Canadian dollar steadied after hitting a one-month low, following the US imposition of 50 percent tariffs on a wide range of Canadian goods in response to what Washington called "discriminatory treatment" by Ottawa.