Dollar Holds Near Two-Month Low as Investors Await Inflation Data

The US dollar steadied at a near two-month low on Monday following soft jobs data from Friday, which saw the U.S. economy unexpectedly shed jobs in July. Job gains for the prior two months were revised sharply lower, cooling expectations for a Fed rate hike next month.

Francesco Pesole, FX strategist at ING, said: 'It (the labour market data) was a negative event for the dollar.'

The futures market scaled back the chance of a September move to around 44% from 67% a week ago. US Treasury yields largely maintained their declines after the jobs report dashed hike bets.

Investors are awaiting this week's inflation data, particularly the core CPI on Wednesday, which is expected to rise 0.2% month-on-month in July and moderate to 2.5% from 2.6% in June.