The dollar was largely unchanged in early European trade Monday, maintaining a firm tone after recent inflation data as the market prepares for this week’s key payrolls release.
At 2:55 AM ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded basically flat at 91.843, having recovered from Friday’s low of 91.524.
USD/JPY was 0.1% lower at 110.62, EUR/USD was down 0.1% at 1.1925, GBP/USD rose 0.1% to 1.3891, while the risk-sensitive AUD/USD was up 0.1% at 0.7590.
The dollar took an initial hit on Friday following the release of the Federal Reserve’s favorite gauge of inflation, the core U.S. personal consumption expenditures price index. This increased 0.5% in May, short of expectations for a 0.6% rise, which reassured some that inflation is not running out of control..
Even so, the year-on-year rise was 3.4%, the biggest jump since 1992, and failed to completely quell fears that the Federal Reserve will be forced to normalize monetary policy sooner than it currently expects.