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Dollar holds near two-month low as markets await US CPI

The dollar index sat around 99.6, while odds for a September Fed move fell to about 44% after a weaker US jobs report.

Reported · Written up by our desk · Major Pairs

The US dollar hovered near a two-month low against major currencies on Monday as investors awaited upcoming inflation data for signals on the Federal Reserve's rate path, according to LiveMint Markets. The dollar index, tracking six major peers, was little changed at 99.6, close to its lowest level since June 2.

The euro rose to $1.1558, near its strongest level since mid-June, while sterling was steady at $1.3490, around a five-week peak. The yen held near 157.90 per dollar after giving back some intervention-driven gains, remaining well off the roughly 164 multi-decade low hit late last month.

Investors trimmed expectations for a near-term Fed move after Friday's US data showed the economy unexpectedly shed jobs in July, with job gains for the prior two months revised lower. US Treasury yields fell, and futures market pricing cut the chance of a September move to around 44% from 67% a week earlier.

Attention is now shifting to this week's inflation and other macro releases, with a consensus forecast calling for core CPI to rise 0.2% month-on-month in July, lifting the annual rate to 2.5%. Additional data, including producer prices and retail sales, are also expected to further inform the inflation outlook.

Latest closeDollar index 99.98 ▲0.3%

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