The U.S. dollar advanced against its major counterparts on Monday amid bets the Federal Reserve will keep interest rates higher for longer, and on concerns about the property market in China.
The dollar gained on safe-haven demand as China Evergrande Group, the world's most indebted property developer, said it was unable to issue new debt due to an ongoing investigation into its main domestic subsidiary, Hengda Real Estate Group Co.
Traders looked ahead to key U.S. inflation data due on Friday to help shape the Fed's policy outlook.
CME Group's Fed Watch Tool is currently indicating a 78.9% chance the Fed will leave interest rates unchanged at its next meeting in late October/early November and just a 21.1% chance of a quarter point rate hike.
Meanwhile, the Fed Watch Tool is indicating a 61% chance the Fed will leave rates unchanged at its December meeting and a 34.2% chance the central bank will raise rates by a quarter point.
The dollar index surged to 106.10 around mid morning, and despite easing to 105.95, remains well above the flat line, gaining about 0.35%.
Against the Euro, the dollar has firmed to 1.0594 from 1.0646. The dollar is up against Pound Sterling at 1.2212, gaining from 1.2241.
Against the Japanese currency, the dollar is stronger at 148.83 yen, rising from 148.25 yen. The dollar is up against the Aussie at 0.6425. Against Swiss franc, the dollar has strengthened to CHF 0.9122, while against the Loonie, it is weak at C$1.3456.
