The dollar index added 0.49% to 98.32, and was on track for its biggest daily percentage gain since July 30

 The dollar gained against major currencies on Monday, rising from a steep decline last week that followed remarks from Federal Reserve Chair Jerome Powell that boosted expectations for a rate cut next month.

The dollar index added 0.49% to 98.32, and was on track for its biggest daily percentage gain since July 30, with the euro down 0.69% at $1.1634, after reaching a four-week high of $1.174225 on Friday.

Major brokerages, including Barclays, BNP Paribas and Deutsche Bank, expect a 25-basis-point Fed rate cut in September following Powell’s remarks on Friday when he said risks to the U.S. jobs market were rising, although he also said inflation remained a threat.

While Powell and company are undoubtedly still leaning toward cutting interest rates next month, the combination of this week’s Core PCE report, next week’s NFP release, and August’s CPI data could still sway the central bank toward holding off if they unanimously point to higher inflation and a weakening jobs outlook, said Matt Weller, global head of market research at StoneX.

In other words, forex traders are realizing that a September rate cut isn’t quite a done deal yet, and traders are hedging their bets against the potential for a split decision to hold rates unchanged for another month, leading to a modest but broad-based recovery in the U.S. dollar, he added.

Traders were pricing in an 84.3% chance for a cut of at least a quarter-point at the Fed’s September meeting, down slightly from the 84.7% in the prior session, according to CME’s FedWatch tool, but well above the 61.9% expectation a month ago.

Measured against six major currencies, the dollar has weakened by more than 9% this year. The euro has been the lead gainer in the group with a climb of more than 12%.

Samy Chaar, chief economist at Lombard Odier, expects the euro to strengthen to nearly $1.20-$1.22 over the next six-to-12 months.