Dollar Soars on Warsh's Rate Hike Hint

The US dollar saw its biggest daily gain in two and a half months after Federal Reserve Chair Kevin Warsh hinted at a possible rate hike.

Warsh made his comments during his first speech at the central bankers' symposium in Jackson Hole, where he stated that the Fed 'would have work to do' if inflation did not continue moving towards the 2% target.

Markets interpreted this as a signal of a possible tightening of monetary policy, with the probability of at least a 25-basis-point rate hike at the Fed's September meeting rising from approximately 35% to 57.5%, according to CME FedWatch.