The dollar found itself in a defensive stance on Monday, following a mixed U.S. jobs report that failed to provide a clear sense of direction. Attention shifted to impending inflation data from the world's two largest economies this week.
According to data released on Friday, the U.S. economy added fewer jobs than initially anticipated in July. However, the report also indicated substantial wage gains and a drop in the unemployment rate.
Although the dollar slipped to a one-week nadir against a basket of currencies in response to the data, its decline was curbed by indications of a persistently tight labor market. This suggested that the Federal Reserve might need to maintain higher rates for an extended duration.
The U.S. dollar index (DXY) managed a slight 0.08% uptick to reach 102.14, recovering from Friday's low of 101.73.
The pound (GBPUSD) experienced a 0.11% dip to $1.2737, while the euro (EURUSD) dipped by 0.14%, resting at $1.0994.
Pepperstone's Head of Research, Chris Weston, noted, "The jobs report provided something for everyone, depending on their preconceptions. The labor market is indeed cooling, but it's not collapsing—it's following the expected trajectory."
The upcoming highlight is U.S. inflation data set to be disclosed on Thursday. Expectations point to a 4.7% year-on-year increase in core inflation for July.