Dollar Surges as Warsh Hints at Further Rate Hikes

The US dollar held steady near a two-week high on Monday as markets increased bets for a rate hike following hawkish comments from Federal Reserve Chair Kevin Warsh.

Warsh stated that the central bank would have work to do if policymakers don't get confidence that inflation is heading down to 2%, indicating further tightening may be needed.

This fueled bets on a September rate hike, with markets raising the implied probability of a move next month to 57% and yields on interest-rate-sensitive two-year US Treasury notes rising to a more than one-month high of 4.33%.