U.S. Dollar banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/IllustrationRegister now for FREE unlimited access to Reuters.comRegisterLONDON Aug 29 (Reuters) – The U.S dollar climbed to a 20-year high against other major currencies on Monday after Federal Reserve Chair Jerome Powell signalled interest rates would be kept higher for longer to bring down soaring inflation.The dollar index , which measures the currency’s value against a basket of peers, scaled a fresh two-decade peak of 109.48.That left its European peers in the doldrums even as hawkish European Central Bank comments boosted expectations for a supersized September rate hike.Register now for FREE unlimited access to Reuters.comRegisterThe euro was down a quarter of a percent in early European trade at $0.99415 , within sight of recent 20-year lows, while Britain’s pound sank to a 2-1/2 year low .London markets were closed for a public holiday.Powell told the Jackson Hole central banking conference in Wyoming on Friday that the Fed would raise rates as high as needed to restrict growth, and would keep them there “for some time” to bring down inflation that is running at more than three times the Fed’s 2% goal.”Powell’s comments endorsed the pricing of a higher Fed funds rate for a longer period,” said Kenneth Broux, a currency strategist at Societe Generale. “The assumption that the Fed would start cutting rates in mid-2023 is premature.”Money markets responded by ramping up bets for a more aggressive Fed rate hike in September, with the chances of a 75bps hike now seen around 70%.U.S. Treasury yields shot up, with two-year bond yields hitting a 15-year high at around 3.49% , bolstering the greenback.The dollar was up 0.8% at 138.81 yen , having hit its highest since July 21, while the offshore yuan fell to a fresh two-year low of 6.9321 per dollar.Sterling fell to a 2-1/2-year low of $1.1649 and was last down 0.5% to $1.1676.”I think for this week, the (U.S. dollar index) is going to track even higher towards 110 points, just as market participants continue to price in more aggressive tightening cycles by the major central banks,” said Carol Kong, senior associate for currency strategy and international economics at Commonwealth Bank of Australia.Speaking at the Jackson Hole Symposium, ECB board member Isabel Schnabel, French Central Bank chief Francois Villeroy de Galhau and Latvian central bank Governor Martins Kazaks all argued for forceful or significant policy action.Even as the potential for a big ECB rate hike in September rises, the euro has struggled given an energy crisis in the bloc that raises recession risks. Russian state energy giant Gazprom (GAZP.MM) is expected to halt natural gas supplies to Europe from Aug. 31 to Sept. 2. read more And as risk-off sentiment gripped world markets, the Australian and New Zealand dollars also succumbed to selling pressure.The Aussie dollar fell to $0.6838, the lowest since July 19, while the kiwi hit its lowest since mid-July at $0.61.In cryptocurrencies, Bitcoin recovered some ground but remained below the $20,000 level it dipped below at the weekend. read more Register now for FREE unlimited access to Reuters.comRegisterReporting by Dhara Ranasinghe; additional reporting by Rae Wee in Singapore; editing by Christina FincherOur Standards: The Thomson Reuters Trust Principles.