Dollar holds near two-month low as markets await US inflation data

The US dollar held steady on Monday, hovering near a two-month low against major currencies as investors awaited the release of US inflation data later this week, seeking clues on the Federal Reserve's interest rate outlook.

The dollar index stood at 99.6 points, while the euro rose to $1.1558 and the British pound held at $1.3490. The Japanese yen was stable at 157.90 against the dollar.

Market data showed expectations for a rate hike in September have dropped to around 44 percent, down from 67 percent a week ago. This follows data showing the US economy unexpectedly lost jobs in July, along with downward revisions to job figures for the previous two months.

Focus on inflation data and market performance

Attention is now on upcoming US consumer and producer price data, as well as retail sales figures, with forecasts pointing to a slowdown in core inflation to 2.5 percent year-on-year in July.

In energy markets, Brent crude rose 1.4 percent to around $85 a barrel amid ongoing uncertainty over the reopening of the Strait of Hormuz.