The dollar index hovered around 100 on Wednesday after staging a sharp intraday rebound in the previous session, as renewed hostilities in the Middle East cast doubt on a fragile ceasefire and the prospects for a longer-term peace agreement. The US launched “self-defense strikes” against Iran in response to the downing of an American helicopter, while Iranian Foreign Minister Abbas Araghchi warned that Iran’s armed forces would leave no attack or threat unanswered. Higher energy prices driven by the regional conflict fueled concerns about inflation and the possibility of central bank rate hikes. Investors also awaited the latest US inflation data for fresh signals on the Federal Reserve’s policy outlook, after stronger-than-expected jobs figures last week reinforced expectations of an interest rate increase before the end of the year. Elsewhere, the ECB and the BOJ are widely expected to raise interest rates later this month.