Dollar Gains Amid Fed Rate Cut Speculation and Global Economic Signals

The dollar regained some of last week's losses as markets anticipated U.S. inflation data following mixed payrolls. With the yen weakening after a recent rally and the euro and pound slightly down, focus shifted to upcoming U.S. inflation and ECB meetings, driving market speculations on future rate cuts.

The dollar reversed some of its losses on Monday as investors awaited U.S. inflation data, following a mixed payroll report that sparked uncertainty over the Federal Reserve's upcoming interest rate decisions. The yen weakened after four days of gains, ending down 0.7% at 143.35 per dollar, down from Friday's one-month high of 141.75.

Attention is now on Wednesday's U.S. inflation report, a key indicator for the Fed's next policy move in September. The euro slipped by 0.3% to $1.1048, and the pound dropped to a more than two-week low of $1.3083. Against a basket of currencies, the dollar rose 0.37% to 101.56.

Friday's anticipated jobs data offered no clear insight on whether the Fed will opt for a regular 25 basis point rate cut or a larger 50 basis point cut at its Sept. 17-18 meeting. Employment increased less than expected in August, though wage growth was solid, signaling a cooling but not alarming labor market. Fed policymakers indicated readiness for rate cuts amid cooling labor market conditions. Japan's recent economic data had little impact on currency markets, while the euro also slipped ahead of the ECB's meeting.

(With inputs from agencies.)