dollar was on the back foot on Monday after a mixed U.S. jobs report provided little directional conviction and as market focus turned to inflation data from the world's two largest economies due this week. The U.S.
economy added fewer jobs than expected in July, data on Friday showed, but it recorded solid wage gains and a decline in the unemployment rate. While the dollar fell to a one-week low against a basket of currencies in the aftermath of the data, its losses were capped as the report pointed to a still-tight labour market, suggesting the Federal Reserve may need to keep rates higher for longer. The U.S.
dollar index last stood at 101.98, languishing near Friday's low of 101.73. Sterling rose 0.04% to $1.2756, while the euro dipped 0.01% to $1.1010. «There was a narrative in there for everyone, depending on your bias,» said Pepperstone's Head of Research Chris Weston of the jobs report.
«We are seeing a cooling of the labour market, but it's not collapsing. It's doing what we hoped it would do.» U.S. inflation data is due on Thursday, where expectations are for core inflation to have risen 4.7% on an annual basis in July.
«It's hard to see the pullback being big across the dollar pairs, because fundamentally the U.S. has still got the best growth, you got a central bank which is still very much data dependant, and I think there are risks this week that the CPI number comes out above expectations,» said Weston. Also due this week is China's July inflation print on Wednesday, with traders on the lookout for further signs of deflation in the world's second-largest economy.
Read more on economictimes.indiatimes.com