FX.co ★ Dollar Holds Steady as Fed Outlook Mulled

The dollar index held above 99 on Monday after a modest rebound in the previous session, supported by stronger-than-expected US employment data that bolstered expectations of a Federal Reserve rate hike in September. Friday’s data showed nonfarm payrolls increased by 162,000 in August, following a revised gain of 23,000 in July and far surpassing forecasts for a 56,000 increase. The unemployment rate remained steady at 4.1%, while annual wage growth eased to 3.1%, though the slowdown was less pronounced than markets had anticipated. In response, investors raised the implied probability of a September Fed hike to around 60%, up from roughly 50% before the report. Market focus now shifts to US inflation figures due this week for further guidance on the central bank’s policy trajectory. The dollar also drew support from safe-haven flows after the US and Iran exchanged strikes on vessels over the weekend, pushing oil prices higher.