Dollar Edges Lower as Rate Hike Bets Rise

The US dollar dipped on Monday but remained near its highest level in nearly two weeks due to increased bets on an interest rate hike following Federal Reserve Chair Kevin Warsh's hawkish remarks. The Dollar Index fell 0.2% to 99.5 by 21:41 GMT, after reaching 99.73 on Friday.

Warsh stated that the US central bank 'will have more work to do' if policymakers don't gain sufficient confidence that inflation is moving toward the 2% target, indicating a possible further monetary policy tightening.

Traders raised the implied probability of a rate increase next month to 58%, and the two-year US Treasury yield held near its highest level in over a month. The upcoming nonfarm payrolls report due on Friday and consumer price inflation data scheduled for next week could influence market expectations ahead of the Federal Reserve's September meeting.