US Dollar Weakens Amid Hawkish Fed Remarks

The US Dollar weakened in response to comments from Goldman Sachs chief economist Jan Hatzius and Federal Reserve Chair Kevin Warsh. Hatzius stated that the Fed will likely hold interest rates steady in September, unless August's inflation data surprises to the upside.

Warsh delivered a more hawkish tone at Jackson Hole, emphasizing that the Fed must be confident underlying inflation is moving towards 2% PCE or 'we have work to do.' This has pushed markets to adjust their expectations, with traders now pricing in a nearly 57.5% chance of at least a 25 basis point rate hike next month.

The Swiss Franc gained as the US Dollar weakened, trading around 0.8090 during Asian hours on Monday. The SNB holds its key policy rate at 0%, and economists do not foresee a rate hike until early 2028. However, market pricing reflects odds of a hike as early as March 2027.