The dollar index rose as much as 0.93% to 107.274 before it pulled back to last trade up 0.4% at 106.73

The U.S. dollar gained against the yen and the euro on Monday but pulled back from its highs of the day with investors betting on a slower pace of Federal Reserve interest rate hikes going forward.

The dollar index rose less than expected in October and prompted bets for slower hikes.

While the greenback appeared to benefit earlier on Monday from hawkish investor readings of weekend comments from Fed Governor Christopher Waller, it lost some ground as the session wore on as investor hopes for slower hikes were renewed by Fed Vice Chair Lael Brainard’s comments on Monday.

Waller said on Sunday that the Fed could now start thinking about hiking at a slower pace but cautioned that the inflation data was ‘just one data point’ and that other readings are needed to show a convincing slowing in price gains.

While Brainard emphasized in an interview with Bloomberg that the Fed has more work to do, she signalled that it will likely slow its tightening pace soon as it figures out how high borrowing costs need to go and for how long in order to bring down inflation.

Markets here are starting to really factor in the top of the Fed cycle, said Shaun Osborne, chief FX strategist at Scotiabank in Toronto, pointing to last week’s U.S. inflation reading as solid grounds to believe it can move lower.

And he noted that Brainard’s comments boosted equity sentiment, which dragged on the dollar on Monday.

Now that the end the end of this tightening cycle is become a little clearer for investors and there’s more confidence equity markets can continue to improve that’s likely to undercut the U.S. dollar to an extent, he said.

We have been looking for at least a moderation in the dollar rally. That seems to be developing now and the scale of moves last week does suggest that the dollar may be poised for a bit more softness in the short run at least.

Investors had seen Waller’s comments as cold water on hopes for a ‘rapid Fed recalibration,’ said Adam Button, chief currency analyst at ForexLive in Toronto.

This had helped the dollar index, which gauges the greenback against a basket of six other major currencies including the euro, yen, and sterling, rise as much as 0.93% to 107.274 before it pulled back to last trade up 0.4% at 106.73.

The euro was last down 0.01% against the dollar at $1.0342, after earlier rising to a three-month high of $1.0368.