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

The US dollar remained near a two-week high on Monday, buoyed by hawkish remarks from Federal Reserve Chair Kevin Warsh and increased expectations of a rate hike in September. Warsh signaled that the central bank may need to tighten policy further to bring inflation down to its 2% target, which lifted the probability of a September hike to 57%.

This shift in focus from currency debasement to economic fundamentals helped restore credibility to the Fed. Meanwhile, the yen slipped below the crucial 160-per-dollar mark, weakening further after Iranian tensions escalated and oil prices surged. Traders are now closely watching key economic data releases, including Friday's nonfarm payrolls report and next week's consumer inflation figures, to gauge market expectations ahead of the Fed meeting.

The euro and British pound both showed slight gains against the dollar. However, the dollar index, which tracks the greenback against six major currencies, still lagged, indicating a continued slide for the US currency.