New york: The US dollar strengthened on Tuesday as investor sentiment remained under pressure from the escalating conflict in the Middle East, while rising oil prices and fading expectations of interest rate cuts further supported the greenback.

According to Qatar News Agency, the dollar index, which tracks the US currency against a basket of six major peers, rose 0.19% to 100.05, bringing its gains to around 2.5% since the outbreak of the US-Israeli war on Iran in late February. The euro fell 0.23% to $1.1479, hovering near its lowest level in more than seven months, while the British pound declined 0.3% to $1.3279.

The Japanese yen also weakened to 159.40 per dollar, moving closer to the 160 threshold, amid a decline of more than 2% in the Japanese currency since the start of March. Meanwhile, the Australian dollar traded choppily after the Reserve Bank of Australia (RBA) raised its benchmark interest rate by 25 basis points to 4.1% earlier in the day in response to accelerating inflation. However, the narrow split in the Monetary Policy Committee's vote tempered support for the currency, which earlier fell to $0.7050 before recovering slightly to $0.7057 in recent trading.

Higher oil prices have prompted investors to reassess the outlook for global interest rates, underpinning demand for the dollar as markets gravitate toward safer-haven assets.