Dollar Edges Lower as Traders Await Crucial Jobs Data

The US dollar slipped lower on Monday as traders await key jobs data due later this week. The data is crucial for Federal Reserve policymakers, who will be watching to see if inflation is heading down to 2 per cent, a goal set by Fed Chairman Kevin Warsh in his remarks last Friday.

Fed funds futures traders now price in a 64 per cent chance of a September rate hike, up from around 35 per cent before Warsh's comments. This increase reflects the hawkish tone taken by Warsh, which has rebalanced the debate towards hawks and increased expectations for further tightening.

This week's jobs report is expected to show that employers added 55,000 jobs in August, according to economists polled by Reuters. However, if the report shows an outright decline in jobs, it could make a rate hike more difficult, as Fed policymakers have not raised interest rates after back-to-back job losses before.