Dollar Holds Steady as Markets Eye Inflation Report

The US dollar held steady on Tuesday ahead of the highly anticipated consumer inflation report for July. The report is expected to shape near-term expectations for Federal Reserve policy, which could impact interest rates.

Traders have trimmed bets on a September Fed hike after last week's jobs report showed employers unexpectedly cut payrolls in July. However, a resurgence in inflation could revive those hike bets as the central bank continues to battle price pressures above its 2% annual target.

Rising oil prices driven by an elusive deal to reopen the Strait of Hormuz have reignited concerns of renewed inflationary pressure. The dollar index rose 0.04% to 99.81, with the euro flat on the day at $1.1542.