Dollar near two-week high as Warsh boosts rate-hike bets; yen slips past 160

Business Recorder reported that the dollar held near a two-week high on Monday as traders lifted their bets on a Federal Reserve rate increase after hawkish remarks from Fed Chair Kevin Warsh. The implied probability of a September move rose to 57%, while yields on two-year US Treasury notes reached 4.33%, their highest in more than a month.

Warsh said on Friday that the central bank would still have work to do unless policymakers gain confidence that inflation is returning to the 2% target, a clearer hint that more tightening could be necessary. OCBC's FX strategist Sim Moh Siong said the comments had reduced worries over currency debasement and helped restore the Fed's credibility.

Investors are now watching US nonfarm payrolls data due Friday and consumer inflation figures next week, which could shape expectations before the September Fed meeting. Brent crude gained close to 2% after the US carried out strikes on Iran's Larak Island, while the yen weakened to 160.01 per dollar, a level that raises the chance of official intervention.