The dollar slid from a 12-week peak on Monday as traders weighed U.S. and European central bankers' monetary options after last week's Jackson Hole meeting, while Beijing's decision to halve stamp duty on stock trading helped to lift the euro.
The dollar index , which measures the U.S. currency against six peers, edged 0.08 lower to 104.08 after hitting its highest since early June on Friday. The index is up more than 2% in August and set to snap a two-month losing streak.
Fed Chair Jerome Powell told the annual Jackson Hole Economic Policy Symposium the central bank may need to lift interest rates further to finish the job of lowering inflation on a sustained basis.
Markets anticipate an 80% chance of the Fed standing pat next month, the CME FedWatch, tool showed, but the probability of a 25 basis point hike in November is at 51% versus 33% a week earlier.
A series of strong U.S. economic data releases has helped to ease worries of a recession, but with inflation still above the Fed's target, some investors worry the U.S. central bank will keep interest rates high for longer.
With the Fed highlighting the importance of the upcoming U.S. economic data, investors' focus this week will be on reports on payrolls, core inflation and consumer spending.
Elsewhere, the euro, which has fallen 1.7% so far in August, rose 0.13% to $1.0808 after China halved the stamp duty on stock trading in its latest attempt to boost the struggling market in the world's second biggest economy.
But the single currency traded near an almost 11-week low hit on Friday after European Central Bank President Christine Lagarde said policy needed to be restrictive.
According to Refinitiv data, the market is evenly split on whether there will be another rise to the 3.75% rate in September.
The yen edged 0.04 lower to 146.51 per dollar, just shy of the more than nine-month low of 146.64 it touched on Friday as traders continue to watch out for any signs of intervention in the currency market from Japanese authorities.
The Bank of Japan will maintain its current ultra-easy policy as underlying inflation in Japan remains "a bit below" its target, the central bank's governor said on Saturday.
Sterling edged 0.08 higher to $1.2587 with London closed for a holiday on Monday, after touching on Friday its lowest level against the dollar since mid June.
Source : Reuters
