Dollar weavers as markets grapple with Gulf tensions

HONG KONG, July 21 (Reuters) - The U.S. dollar hovered near a one-week high on Tuesday, with markets torn between conflicting Middle East signals, as hostilities in the region stoked renewed fears over energy supplies while hopes for a ceasefire offered some relief.

Against the yen, the dollar was largely flat at 162.49 yen. The euro was little changed at $1.1417, while the British pound was roughly 0.1% firmer at $1.3441 after Britain's new Prime Minister Andy Burnham vowed to stick to fiscal rules.

The U.S. dollar index, which measures the currency against a basket of six peers, was steady at 100.93, after touching its highest level since July 15 in the previous session.

Markets remained hostage to Middle East tensions, with oil prices seeing a sharp swing to near six-week highs before retreating. Yemen's Iran-aligned Houthis declared a naval blockade on Saudi Arabia, raising threats to global energy supplies, while hopes of de-escalation persisted after Tehran received a 10-day ceasefire proposal from mediators.