Dollar Rises After Fed Official's Hawkish Comment: Read This Before Making Your Next Forex Trade

The dollar index hit its highest level since mid-July, trading near 108.22 during Monday morning Asia session, following a hawkish comment from a U.S. Federal Reserve official last week. 

Traders are also eyeing Fed Chair Jerome Powell’s speech on the economic outlook at the Jackson Hole summit later this week, which will give an indication of how aggressive the rate hikes will be in the near future.

Dollar Index: The dollar index is a gauge that reflects the strength of the greenback against a basket of currencies. Its recent high stood at 108.54 as of mid-July, after which mixed expectations about rate hikes following a softer U.S. inflation in July had dragged the index down to as low as 105.09 in early August.

Also Read: Alibaba, Nio, XPeng Slide Over 1%: Hang Seng Falters As US Rate-Hike Fears Grow

Fed Official Comment: On Friday, Richmond Federal Reserve President Thomas Barkin said the "urge" among central bankers was towards faster, front-loaded rate increases, reported Reuters.

Rate Hike Projections: According to money markets, there is a 47.5% chance for another supersized 75 basis point rate hike on September 21, with a 52.5% chance for a 50 bps hike, as per the report.

Currency Movements: In Monday morning Asia session, the euro fell to lows seen during mid-July after Russia declared a three-day halt to European gas supplies via the Nord Stream 1 pipeline at the end of August, Reuters reported. China's yuan fell to its lowest in nearly two years after the People’s Bank of China (PBoC) cut key lending rates. The USD/JPY pair rose as high as 137.43, its strongest level since end-July.