Dollar Hits One-Month High Amid Lingering Rate Hike Fears

The US dollar has reached a one-month high as traders weigh the possibility of a Federal Reserve interest rate hike. Despite falling oil prices, which eased some concerns over inflation, markets are pricing in a 37.9% chance of at least a 25-basis-point increase from the Fed this week.

CME FedWatch shows expectations for a rate hike have risen from 16% just last week. Chris Weston, head of research at Pepperstone, noted that 'the lack of meaningful buying at the front end of the Treasury curve has helped keep the US dollar well supported.'

Investors will also be watching the release of US second-quarter GDP data and core PCE inflation this week for more clues on the health of the world's largest economy.