The US dollar witnessed a further slip on Monday, after recording its most significant weekly gain in over two months last week, as profit-taking was driven by concerns over the direction of US monetary policy.

Riskier currencies, such as the Australian dollar, the Norwegian crown, and the Canadian dollar, benefited from the lower dollar in subdued London trade, jumping more than 0.5 percent.

Last week, the dollar index touched a nine-month high, rising over 5% from May lows, as investors increased their wagers that the US Federal Reserve will begin to taper its post-pandemic stimulus measures before Europe and Japan.

On Friday, however, Dallas Federal Reserve President Robert Kaplan dashed such hopes, saying he could reassess the necessity for an early beginning to tapering if Covid causes an economic impact.

According to some experts, the strain’s spread might jeopardize the Fed’s intentions to reduce its pandemic-era stimulus plan.

Fed Chair Jerome Powell, who has mainly downplayed Delta’s ramifications, will speak about the economy at the central bank’s Jackson Hole conference on August 26-28 that will be closely scrutinized by traders looking for signals about the speed of policy tightening.

In a note, MUFG analysts stated that the risk-off is poised to keep the dollar supported. They added that while a cautious Fed must control the dollar gains, they will need to alter the year-end FX predictions to indicate less dollar depreciation now that COVID risks have increased.

The dollar index, which measures how the dollar performs versus other major currencies, fell 0.2 percent to 93.29, although it was still near the high of 93.734 reached on Friday, which was its best level since early November.

The drop on Monday went against the trend in fixed income markets, which saw 10-year inflation-adjusted Treasury rates rise above 1% for the first time in almost a month.

Investors like Stephen Jen, the founder of hedge fund Eurizon SLJ Capital, are still bullish on the dollar in the long run.

He stated perhaps I was premature in making this prediction. Still, a robust US economy centered on technology and embracing creative destruction would certainly experience increased trend growth in the coming years.

However, the euro rose to a three-day high as statistics showed that the eurozone business expanded significantly this month. The rate of expansion slowed as worries of new Covid-19 strains imposing further limitations weighed on mood. Bitcoin, the most popular Cryptocurrency, surpassed $50,000 for the first time since mid-May and was last trading 2.06% higher at $50,333.24.