The dollar rose to a two-week high against the euro on Monday, September 2, as bets on a sharp U.S. monetary easing path faded, while traders awaited the release of the U.S. jobs report this week.
The dollar rose to its highest level since August 21 against the yen, supported by a rise in long-term US Treasury yields to their highest levels since mid-August after data showed no significant decline in inflation, reducing the possibility of the US Federal Reserve cutting interest rates by 50 basis points on September 18.
US Federal Reserve Decision Expectations
Traders expect a 33% chance that the Fed will cut interest rates by 50 basis points in September, compared to a 67% chance that it will cut them by 25 points.
A week ago, traders favored the first possibility by 36%.
The dollar rose about 0.27% to 146.60 yen before retreating to 146.04 yen in morning trading by 0510 GMT.
The dollar index against six major currencies rose to 101.79 points in early trading in Asia, a level not seen since August 20.
The index recorded 101.72 points in the latest trading.
The euro fell to $1.1042, its lowest level since Aug. 19, before trading at $1.1046.
Analysts said a US holiday on Monday was affecting the dollar's performance, but the next few days will see a series of economic data including non-farm payrolls data on Friday.
U.S. Treasuries will not trade on Monday due to a holiday, but the yield on the 10-year note was at 3.9110% after rising 4.4 basis points on Friday.
The pound was steady at $1.31255, close to Friday's low of $1.31095, its weakest since Aug. 23.
