The dollar edged lower on Monday but remained near a one-week high with fragile sentiment against a backdrop of conflict in the Middle East supporting demand for the safe-haven currency.
Israel's bombardment of Hamas-ruled Gaza continued overnight, with residents saying it was the heaviest pounding yet in nine days of conflict.
The dollar index eased 0.08% to 106.47, but held close to highs touched on Friday, with investors also waiting to hear a speech by Federal Reserve Chair Jerome Powell later this week for clues on the U.S. interest rate outlook.
The Israeli shekel slid to a more than an eight-year low of 3.99 per dollar, after the country's Prime Minister Benjamin Netanyahu vowed on Sunday to "demolish Hamas" as his troops prepared to move into the Gaza Strip.
The shekel has fallen more than 4% against the dollar since gunmen from the Palestinian group Hamas rampaged through Israeli towns on Oct. 7.
There was some respite for the euro and sterling, which were off one-week lows touched on Friday against the dollar. The euro was last 0.2% higher at $1.05233. Sterling gained 0.15% to $1.2163.
Poland's zloty rallied against the euro to its highest in two months, and was last up 1.2% at 4.4775.
The ruling nationalists in Europe's largest emerging economy appeared to have lost their parliamentary majority in the nation's most pivotal election in decades on Sunday, potentially opening the way for opposition parties to seize power.
Lukazs Janczak, analyst at Erste Group in Poland, called the first reactions in markets positive.
Meanwhile, New Zealand's centre-right National Party led by Christopher Luxon will form a new government with its preferred coalition party ACT after Saturday's general election.
The New Zealand dollar rose 0.71% to $0.5926.
The yen was flat at 149.53 per dollar, close to the sensitive 150-level. Some traders see an increased potential for Japanese authorities to intervene to support the yen if it weakens past that level.
Source : Reuters
