Dollar hits 1-month high as traders price 40% odds of Fed hike
What's next: Wednesday's Fed decision, second-quarter GDP and core PCE data could test bets for a July or September move.
The US dollar held near a four-week high Tuesday and gold fell as traders raised bets that the Federal Reserve could lift interest rates this week. Markets priced roughly a 40% chance of a quarter-point increase at Wednesday's decision, up from about 20% a week earlier, while traders saw almost a 95% probability of a hike by September. The dollar index touched 101.58, its highest since June 25, and spot gold slipped 0.7% to $4,047.22 an ounce after earlier dropping as much as 0.8%. Treasury yields have risen since April as the US-Iran conflict pushed up oil prices and inflation worries, though easing hostilities recently helped cool some of those concerns.