LONDON—The dollar hovered near its highest levels in a year against a basket of peers on Thursday on rising expectations the Federal Reserve will taper stimulus from November, while a bounce in iron ore prices boosted the commodity-linked Australian dollar. The safe haven greenback has made sharp gains over the last two sessions on concern the Fed could withdraw economic support as global growth slows and high inflation is high. Spiking bond yields added to the currency’s strength. Its rise is despite an impasse in Washington over the U.S. debt ceiling that threatens to plunge the government into a shutdown. The dollar index—which measures the currency against a basket of six rivals—stood at 94.294, little changed from Wednesday, when it hit 94.435 for the first time since late September last year. Yields on the benchmark 10-year Treasury note stood at 1.5289 percent, holding near a mid-June high reached Tuesday at …