The euro held just above $1.165, near its highest level since mid-May, as investors weighed falling oil prices and the European Central Bank's interest-rate outlook. Iran said it had resumed talks with Oman on managing the Strait of Hormuz, raising hopes that the key waterway could reopen and reduce disruptions to energy shipments. Reuters reported that ECB policymakers are prepared to raise rates at their September meeting to contain the economic fallout from the Iran war, although they are reluctant to signal further tightening afterward. ECB board member Isabel Schnabel said rates may need to rise further if the Middle East conflict persists, pointing to upside inflation risks from the resilient euro-area economy. Money markets are pricing less than 40 basis points of additional ECB tightening by year-end, while a September rate increase is nearly fully priced in.