The dollar edges higher as oil prices rise on news of new attacks in the Israel-Iran conflict, fuelling concerns over crude supply disruptions.

The risk of an oil price spike due to Middle East tensions will likely keep the Federal Reserve in a cautious stance over interest-rate cuts at its two-day meeting starting Tuesday, Swissquote Bank analyst Ipek Ozkardeskaya said in a note.

Higher oil prices are also positive for the dollar because the U.S. is one of the world's largest oil producers.