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Dollar edges lower as traders price higher odds of September hike

Euro was up 0.27% to $1.1615 and sterling rose 0.07% to $1.3544 as fed funds futures odds for a September rate hike climbed to 64% after Kevin Warsh’s hawkish remarks.

Reported · Written up by our desk · Major Pairs

The dollar edged lower on Monday in a relatively subdued session, after fed funds futures raised the odds of a September interest rate hike following last week’s hawkish remarks from Federal Reserve Chairman Kevin Warsh, according to Reuters. Traders are also looking ahead to key U.S. jobs data later this week. The August hiring report is expected to show employers added 55,000 jobs, based on the median estimate of economists polled by Reuters, following a July release that showed an unexpected drop in hiring. Marc Chandler of Bannockburn Global Forex said that if jobs show an outright decline, it would be hard to see the Fed raising rates, noting the historical pattern of not tightening after back-to-back job losses. In currency moves, the euro rose 0.27% to $1.1615, while sterling strengthened 0.07% to $1.3544. The dollar index, which tracks the U.S. currency versus six major peers, was down 0.24% at 99.43 after finishing Friday at 99.73, its strongest level since August 17. Reuters also noted the index remains on track for a second straight monthly decline, and that Warsh said the Fed will have more work to do if policymakers do not gain confidence inflation is moving toward the 2% target.

Latest closeDollar index 99.68 ▲0.5%

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