Dollar Falls as Fed Hints at Further Rate Hikes

The US dollar slipped lower on Monday after Federal Reserve Chair Kevin Warsh hinted at further rate hikes to combat inflation. In his remarks, Warsh stated that policymakers would 'have work to do' if they don't get the confidence they need that inflation is heading down to 2 percent.

Markets responded by increasing bets on a September rate hike, with the implied probability rising to 58 percent. This shift has also led to higher yields on interest-rate sensitive 2-year US Treasury notes.

The dollar index fell 0.11 percent to 99.53, its lowest level since August 17. Despite this decline, the euro and sterling both edged up against the dollar, with the euro reaching $1.1597 and sterling at $1.3543.