Dollar Consolidates Gains as Markets Weigh Fed Hike Odds

Financial markets are adopting a cautious stance on August 31 as investors assess the shifting odds of a Federal Reserve interest rate hike in September and re-escalating tensions in the Middle East.

The US Dollar (USD) has been consolidating its Fed-inspired rally, with the USD Index staying at around 99.50 in the European morning after gaining more than 0.5% on Friday and reaching a two-week high above 99.70.

Fed Chair Warsh's hawkish tone at the Jackson Hole Symposium has kept Dollar bulls alert, with strategists at Rabobank noting that markets 'accordingly priced a greater probability of additional rate increases' in the wake of his remarks.