New york: The US dollar index climbed to 100.56 on Monday, marking its highest level since last May, as investors turned to the greenback for safety amidst escalating tensions in the Middle East and a sharp rise in oil prices.

According to Anadolu Agency, the index, which measures the US currency against a basket of major peers, was last up about 0.16% after touching 100.56 earlier in the session. This increase occurred as markets weighed the risk of a prolonged conflict and its potential inflationary effects.

The dollar's ascent coincided with Brent crude trading above $116 a barrel, heading for a record monthly gain. This development has heightened concerns that rising energy costs could complicate the outlook for inflation and monetary policy.

The US currency garnered support from safe-haven demand and the perception that the US economy is relatively more insulated from the oil shock, given its status as a net energy exporter.

Simultaneously, investors adjusted expectations for Federal Reserve rate cuts, increasingly considering the possibility of a more hawkish policy response if energy-driven price pressures persist.

The euro experienced a decline of 0.36% to $1.1466, while sterling dropped 0.54% to $1.3185, as concerns over growth and inflation negatively impacted European currencies.

In broader markets, investors remained attentive to speeches from top Federal Reserve officials and the evolving conflict, with volatility expected to persist across currencies, commodities, and equities.