The dollar held near a two-month high on Wednesday as expectations for further interest-rate increases supported the U.S. currency, while easing oil prices tied to diplomatic efforts over the Iran conflict left investors cautious. The euro traded at $1.1446, sterling at $1.3337 and the dollar index at 100.56. Brent crude futures stood at $99.22 a barrel, up 37% since the conflict began at the end of February. US President Donald Trump warned he could annihilate Iran without a deal, while also suggesting an agreement could emerge soon through United Nations diplomacy. Investors are also focused on a meeting between Trump and Chinese President Xi Jinping. The yen traded at 157.55 per dollar as markets viewed the Bank of Japan's recent rate increase to a 31-year high as insufficiently hawkish, keeping intervention concerns alive during Japan's holiday and thin trading conditions.