The US dollar rose on Monday as investors continued to assess Friday's weak employment report while awaiting inflation data due this week for further clues on the Federal Reserve's interest-rate path.

The US Dollar Index, which measures the currency against six major peers, rose 0.2% to 99.7 at 11:29 GMT, after hitting its lowest level since June 15 on Friday.

Meanwhile, speculators increased their net short positions in the dollar over the past week to the highest level since December 2022, according to data from the commission.

The euro was little changed at $1.1563, remaining close to its strongest level since mid-June, while sterling held steady at $1.3496, below a three-and-a-half-week high.

The yen weakened to 158.52 per dollar, continuing to pare gains driven by authorities' intervention in the foreign-exchange market. However, it remained well above its multi-decade low of around 164 per dollar reached late last month.

The Australian dollar was steady at $0.7071 ahead of the Reserve Bank of Australia's interest-rate decision on Tuesday. The central bank is expected to keep its benchmark rate at 4.35% for the remainder of the year.

Economic data

Friday's data showed that the US economy unexpectedly lost jobs in July, while employment gains for the previous two months were sharply revised lower, reducing expectations that the Federal Reserve will raise interest rates next month.

The weak labor-market data have increased the importance of Wednesday's Consumer Price Index report, with investors looking for further indications of the direction of Federal Reserve monetary policy.

Analysts view the labor-market data as a negative development for the dollar, suggesting that the currency's outlook remains bearish this week. However, an unexpectedly strong CPI reading could prompt markets to once again price a rate hike as the base-case scenario.

Market expectations for a September rate hike have fallen to around 44%, compared with 67% a week ago. US Treasury yields have also largely maintained their post-jobs-report declines as the data reduced bets on a rate hike, with the 10-year Treasury yield trading around 4.647%.

Core consumer prices are expected to rise 0.2% month-on-month in July, while the annual rate is forecast to slow to 2.5% from 2.6% in June.

Producer-price data due on Thursday and retail-sales figures scheduled for Friday will provide further clues on the inflation outlook.

Iran and Strait of Hormuz developments in focus

Investors continue to closely monitor talks aimed at reopening the Strait of Hormuz and their potential impact on energy prices.

Iran said an agreement with Oman to establish new shipping corridors is under discussion, but indicated that the United States still needs to meet additional conditions, adding to uncertainty surrounding energy supplies.