Dollar Weakens as Fed Rate Hike Expectations Grow, Yen Stalls Near 160

The US dollar declined to 99.37 on Tuesday as traders weighed rising expectations for monetary tightening from both the Federal Reserve and the Bank of Japan.

The dollar index, which tracks the greenback against a basket of six major currencies, fell after gains in the prior session.

Market participants are increasingly factoring in a possible Fed rate increase this month, spurred by recent hawkish remarks from Chair Kevin Warsh.

Meanwhile, the Japanese yen traded close to the 160-per-dollar mark, but firmed slightly to 159.81 per dollar after dipping past the critical threshold in the preceding two trading days.