Dollar Stalls Near Two-Week Peak as Warsh Stokes Rate Hike Concerns

The US dollar held near its strongest position in two weeks after Federal Reserve Chair Kevin Warsh's hawkish remarks at the Jackson Hole address on Friday. Warsh emphasized that policymakers will 'have work to do' if they fail to see convincing evidence of inflation returning to the 2% target, implying additional rate increases may be necessary.

The likelihood of a September rate increase surged to 58%, up from approximately 40% one week prior. The dollar index decreased 0.11% to reach 99.53 on Monday, remaining near its highest point since August 17.

Japan's yen fluctuated around the critical 160-per-dollar threshold, temporarily weakening beyond it before strengthening marginally to 159.57 against the dollar. US Treasury Secretary Scott Bessent described recent yen movements as 'pretty well contained.'

The euro and British pound appreciated versus the greenback, trending toward their second consecutive monthly advance. Oil prices advanced significantly on Monday following a US military operation against Iran's Larak Island, with Brent crude futures jumping 2.5% to $90.21 per barrel.