Dollar Hovers Near Two-Month Low Amid Inflation Data Uncertainty
The U.S. dollar is hovering near a two-month low against major currencies as investors await this week's inflation data for clues on the Federal Reserve's next move.
Friday's jobs data showed the economy unexpectedly lost jobs in July, while payroll gains for the prior two months were revised sharply lower.
This has eased expectations for a Fed rate hike next month, pushing U.S. Treasury yields lower and cutting the implied probability of a September move to about 44%, from 67% a week earlier.
BNY senior EMEA market strategist Geoff Yu notes that weaker U.S. labor-market signals are pulling down real-rate expectations and extending the dollar's decline, while adding that inflation perceptions are likely to be the main driver for currencies this week.