Dollar Steady Ahead of Key US Inflation Data Release

The US dollar remained stable on Tuesday as investors awaited the release of key inflation data for July. The highly anticipated report is set to shape near-term expectations for Federal Reserve policy, particularly regarding interest rate hikes.

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

Rising oil prices, driven by ongoing tensions in the Middle East and Russia, have reignited concerns over renewed inflationary pressure. Oil prices edged up to a one-week high on Tuesday, with energy prices remaining below recent highs.