Dollar Steadies After Jobs Data Amid Fed Rate Path Uncertainty

The US dollar steadied near its two-month low on Monday following soft jobs data from Friday. The labour market report showed an unexpected loss of jobs in July, with revisions to prior months' gains also lower than expected.

This softening has added weight to Wednesday's inflation data, which will provide further clues on the Federal Reserve's rate path. According to Francesco Pesole, FX strategist at ING, 'It (the labour market data) was a negative event for the dollar.'

The euro and pound were little changed near their strongest levels since mid-June, while sterling hovered just below its three-and-a-half-week peak touched on Friday.

The yen weakened 0.6% to a low of 158.89 per dollar, with speculators slashing their bearish bets on the Japanese currency by the most in over 12 years, according to data from the Commodity Futures Trading Commission.