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Dollar Near Two-Week High as Warsh Boosts Rate-Hike Bets; Yen Slips Past 160
Markets lifted September rate-hike bets to 57% after hawkish comments from Federal Reserve Chair Kevin Warsh, while the yen weakened past 160 per dollar.
- On Monday, the Dollar held near a two-week high as markets ramped up bets on a rate hike following hawkish remarks by Federal Reserve Chairman Kevin Warsh, raising the implied probability of a September Fed move to 57 per cent.
- The Japanese Yen slipped past the closely watched 160-per-dollar level ahead of a G20 MEETING in Washington, pressured by negative real rates and the Bank of Japan's cautious monetary policy stance.
- Treasury Secretary Scott Bessent said on Sunday that recent Yen moves had been "pretty well contained" and that he expected Japan Governor Kazuo Ueda to "do the right thing" on monetary policy.
- Dollar demand climbed on Monday as Brent oil rose nearly 2 per cent following American forces striking Iran's Larak Island on Sunday, marking the first known strike on Iran since late July.
- OCBC FX strategist Sim Moh Siong said Warsh's defense of inflation targets rebuilt Fed credibility and shifted focus to fundamentals, though UBP senior economist Carlos Casanova cautioned that interventions only hold when fundamentals align.
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Rupee opens 11 paise lower at 95.49 against US dollar
The Indian rupee fell 11 paise to 95.49 against the US dollar as market expectations for a Fed rate hike increased after hawkish comments from Fed Chair Kevin Warsh. Rising crude oil prices also put pressure on the rupee, though Asian currencies reacted mildly.
·New Delhi, India
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Federal Reserve Chair Kevin Warsh hinted at the possibility of an interest rate hike, expressing concerns about inflation. This move conflicts with President Trump's calls for rate cuts, heightening tensions over the direction of U.S. monetary policy ahead of the November midterm elections. The market is closely watching the Fed's future decisions, increasing the likelihood of a rate hike.
Coverage Details
Total News Sources15
Leaning Left1Leaning Right3Center4Last UpdatedBias Distribution50% Center
Bias Distribution
- 50% of the sources are Center
50% Center
13%
C 50%
R 37%
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