Dollar Surges Near Two-Week High as Warsh Boosts Rate-Hike Bets

The US dollar held steady near a two-week high on Monday, driven by increased bets on a rate hike after Federal Reserve Chair Kevin Warsh's hawkish remarks.

Warsh stated that the central bank will 'have work to do' if policymakers don't get the confidence they need that inflation is heading down to 2 percent, indicating further tightening may be necessary to curb price pressure.

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