Dollar holds near 18-month high ahead of US inflation data

The US dollar held steady on Monday near its highest level in 18 months, as investors remained cautious amid rising tensions in the Middle East and awaited key US inflation data due this week, which could influence the Federal Reserve's monetary policy direction.

Market data showed the dollar index, which measures the greenback against a basket of six major currencies, edged down slightly to 102.16 points. The dollar also slipped 0.06% against the Japanese yen to 158.245 yen, with trading subdued due to a Japanese market holiday.

Meanwhile, the euro rose 0.1% to $1.121, and the British pound gained by the same margin to reach $1.3245. The Australian dollar was steady at $0.69815, while the New Zealand dollar held at $0.56080.

In Asian markets, the Indian rupee climbed 1% to 95.8 against the dollar, while the South Korean won rose 0.5% to 1,334 per dollar.

Markets await inflation data and Fed meeting

Markets are awaiting the release of the US consumer price index on Wednesday, ahead of the Federal Reserve meeting scheduled for late October, when a decision on interest rates is expected.