LONDON—The dollar shot higher on Monday, briefly scaling fresh 20-year highs against a basket of other currencies, as Federal Reserve Chair Jerome Powell signaled interest rates would be kept higher for longer to bring down uncomfortably high inflation.
The dollar index, which measures the currency’s value against a basket of peers, scaled a fresh two-decade peak of 109.48 before pulling back slightly as the European session wore on.
It held around 0.5 percent firmer against Japan’s yen, while China’s yuan breached the key threshold of 6.9 per dollar and Britain’s pound hit a fresh 2–1/2 year low.
The euro managed to claw back some ground and was last up 0.3 percent at $0.9993 as hawkish European Central Bank comments lifted expectations for a supersized September rate hike….