Dollar hits one-month high on lingering chances of Fed hike

The US dollar index rose to a one-month high of 101.55 as markets priced in a 36.3% chance of a 25 basis point Fed rate hike at this week's policy meeting, up from 16% a week ago, with an 81% chance priced in for September. A stronger dollar typically pressures emerging market currencies like the rupee and can trigger FII outflows from Indian equities. Central banks in UK and Japan are also set to announce policy decisions this week, with the Bank of Japan expected to maintain a hawkish stance to support the yen.