Dollar Stabilizes After Soft Jobs Data, Inflation Report Looms

The US dollar steadied at its near two-month low on Monday following soft jobs data released on Friday. Investors are now focusing on this week's inflation data to gain more insight into the Federal Reserve's interest rate path.

Data from last week showed that the US economy unexpectedly shed jobs in July, while job gains for the prior two months were revised sharply lower. This has cooled expectations of a Fed rate hike next month.

Francesco Pesole, an FX strategist at ING, noted that the labor market data was 'a negative event for the dollar'. He added that if this week's CPI report shows a hot break, markets may once again price in a rate hike as their baseline.