SINGAPORE, Oct 16 Reuters The dollar came off highs in Asian trade on Monday, but held at elevated levels as Middle East tensions escalated, and investors awaited clues to the outlook for U.S. interest rates from a speech by Federal Reserve Chair Jerome Powell later this week.

The dollar stayed near a oneweek high against the euro and sterling as risk sentiment remained fragile.

The euro was last 0.13 higher at 1.05265, having slid to a oneweek low of 1.0496 on Friday.

Sterling gained 0.13 to 1.2160, steadying from Friday39;s oneweek low of 1.2123.

The dollar index fell 0.07 to 106.49.

I view what39;s going on in Israel as a regional conflict, which typically does not have meaningful impacts on financial markets over time, said David Chao, Invesco39;s global market strategist for Asia Pacific exJapan.

I don39;t see it altering growth trajectories of the major economies nor does it make the Fed more hawkish. If anything, I think the Fed is less inclined to tighten going forward given the perception of heightened risks.

Elsewhere, the Israeli shekel slid to a more than an eightyear low of 3.99 per dollar, after the country39;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 3 against the dollar since gunmen from the Palestinian group Hamas rampaged through Israeli towns on Oct. 7.

The yen was last 0.1 stronger at 149.39 per dollar, edging away from the…