Dollar Slips as Traders Eye Friday Jobs Data and Interest-Rate Hopes

The US dollar slipped on Monday in a relatively quiet session as traders looked ahead to Friday's jobs data. The futures market has raised odds of a September interest-rate hike after Federal Reserve Chairman Kevin Warsh made hawkish remarks last week.

The July jobs release showed an unexpected drop in hiring, reducing expectations that the Fed would raise rates. However, economists polled by Reuters estimate that employers added 55,000 jobs during August, which could change the narrative.

Marc Chandler, chief market strategist at Bannockburn Global Forex, said 'If we get an outright decline in jobs, I don't see how the Fed can raise interest rates.' The dollar index was down 0.24% at 99.43 after hitting its strongest since August 17.

The euro and sterling strengthened against the dollar, with the euro rising 0.27% to $1.1615 and sterling strengthening 0.07% to $1.3544. The US central bank's next meeting is on September 15-16, with fed funds futures traders currently pricing in 64% odds of a September rate hike.