Dollar gains traction as Fed speakers warn of risks from inflation

"The rates market isn't simply pricing another hike," said Chris Weston, head of ​research at Pepperstone Group Ltd in Melbourne. "It's questioning how restrictive US monetary policy ​may ultimately need to become, and that's a far more consequential debate for risk assets.

"The dollar held onto its gains against its major peers in early Asian trade. The euro and ​the British pound were flat at $1.1168 and $1.3345, respectively. Against the yen, the US ​dollar was unchanged at 158.715 yen.

The Australian dollar was up 0.1% at $0.6870, edging back ‌from ⁠a seven-month low, while the New Zealand dollar was flat at $0.5605.

Comments from voting members of the Federal Reserve's rate-setting committee signalling unease over high inflation have firmed expectations for further rate hikes, prompting traders to all but abandon bets that the US ​central bank will stand ​pat at its ⁠next policy meeting, which concludes on December 9.

Fed funds futures now imply a 91.9% chance of a 25-basis-point rate hike next ​month, up from 84% a day earlier, ​Group's Fed. Watch tool. ⁠Markets have fully priced out the possibility of a pause and see a 9.1% chance of a larger 50-basis-point move, while assigning better-than-even odds to a second hike ⁠in January.

The ​yield on the US 10-year Treasury bond ​was up 13.8 basis points at 4.996%. In cryptocurrencies, bitcoin was down 0.3% at $73,566.45 while ether was 0.5% ​lower at $2,044.61, both trading near three-month lows.