The dollar index stayed above 100 on Monday, hovering near a six-month high as investors continued to assess the Federal Reserve’s monetary policy outlook. New York Fed President John Williams said Friday that a near-term rate cut remains possible as labor market weakness poses a greater risk than elevated inflation. Markets now price in about a 69% chance of a 25 basis point rate reduction in December, up from 44% a week earlier. Still, policymakers remain divided on the path forward, with Boston Fed President Susan Collins saying she has not yet made up her mind on a potential move. The dollar edged higher against the euro and sterling as fiscal strains in Europe came into focus, while the yen gave back part of Friday’s gains as traders weighed fresh verbal intervention from Japanese authorities.
