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

The dollar reached near a two-week high on Monday, driven by increased expectations of a rate hike following hawkish comments from Federal Reserve Chair Kevin Warsh. Meanwhile, the yen dropped below the 160 mark against the dollar. Federal Reserve Chair Kevin Warsh suggested further tightening may be necessary to bring inflation down to a 2% target, boosting bets on a September rate increase.

This has reduced the dollar's downside and refocused attention on economic fundamentals, according to OCBC's FX strategist Sim Moh Siong. The euro rose slightly against the dollar, while the British pound remained relatively unchanged. The dollar index decreased slightly following its strong performance on Friday. A coordinated effort to curb Iran ties and ease bond yield concerns is expected during the upcoming G20 finance ministers meeting.

The yen's weakness continues to be a concern, with the dollar's strength adding pressure to the Japanese currency.