FOREX-Dollar climbs after Warsh comments, poised for weekly gain

The U.S. dollar rose ‌on Friday, extending gains after U.S. Federal Reserve Chair Warsh hinted interest rate hikes may be needed should policymakers not believe inflation is headed back ‌towards the central bank's 2% target. In his debut speech at the ‌Jackson Hole symposium of central bankers, Warsh said the Fed will "have work to do" should inflation not appear to be cooling, in remarks that acknowledged financial conditions ⁠do not ​appear restrictive ⁠and marked the closest he has come to acknowledging interest rate hikes may be needed ⁠to ease price pressures.

Expectations for a rate hike of at least ​25 basis points at the Fed's September meeting jumped to about ⁠50% following Warsh's comments, up from about 35% before the speech. The dollar index, which ⁠measures ​the greenback against a basket of currencies, rose 0.46% to 99.57 after hitting a session high of 99.592, with the euro ⁠down 0.46% at $1.1597.

Against the Japanese yen, the dollar strengthened 0.32% to 159.9 while ⁠sterling weakened ⁠0.45% to $1.3533.