NEW YORK: The dollar hit a more than two-year low and a fourth straight month of losses on Monday in the wake of the US Federal Reserve's policy shift on inflation.

Against a basket of currencies the dollar was down 0.15% at 92.097 in midday trading, having earlier hit its lowest since April 2018. It is down 1.24% for the month, marking its worst August in five years and the longest run of monthly losses since the summer of 2017.

The euro, which makes up the majority of the basket against which the dollar index is weighted, was up 0.35% at $1.195, having gained 1.45% in August, also its fourth straight month of increases.

Investors are adjusting to a speech last Thursday in which Federal Reserve Chair Jerome Powell outlined an accommodative policy change that is believed could result in inflation moving slightly higher and interest rates staying lower for longer.

The yen weakened by 0.48% to 105.84 per dollar on the view that Japan's next leader will stay the course on the 'Abenomics' economic revival program. The yen climbed to 104.195 on Friday after Shinzo Abe's resignation as prime minister for health reasons.