FX.co ★ Dollar Holds at 6-Month High

On Monday, the dollar index maintained a position above 100, remaining close to its six-month peak, as investors continued to evaluate the Federal Reserve's approach to monetary policy. On Friday, John Williams, President of the New York Federal Reserve, indicated that a rate cut in the near future is still a possibility, citing the labor market's frailty as a more significant concern than high inflation. Currently, markets reflect an approximately 69% probability of a 25 basis point rate cut in December, a notable increase from the 44% likelihood observed a week prior. Nevertheless, Federal Reserve policymakers are divided regarding the next steps. Boston Fed President Susan Collins expressed uncertainty about her decision on a potential policy move. The dollar saw gains against the euro and the British pound as financial challenges in Europe came to the fore, while the yen slightly retreated part of its Friday gains as traders interpreted the latest verbal interventions by Japanese officials.