Investing.com - The dollar was little changed against the other major currencies on Tuesday as U.S. markets returned from holidays, amid ongoing uncertainty over the chances of a rate hike by the Federal Reserve this year.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, dipped to 95.67, holding above the one-week low of 95.17 struck after Friday’s lackluster U.S. jobs report.
The U.S. economy added 151,000 jobs in August, below the figure of 180,000 that economists had expected.
The data dampened expectations that the U.S central bank will raise interest rates again this year.
The Fed raised interest rates for the first time in almost a decade in December.
Expectations of higher interest rates typically boost the dollar by making it more attractive to yield seeking investors.
The euro and the yen were trading in tight ranges, with EUR/USD easing up to 1.1159.
Traders were looking ahead to the European Central Bank meeting later in the week to provide some direction for the pair.
The dollar was slightly lower against the yen, with USD/JPY edging down to 103.34.
The dollar had fallen against the yen on Monday, pulling back from Friday’s five-week highs after the Bank of Japan tempered expectations for additional monetary easing at its upcoming policy review later in the month.
BoJ Governor Haruhiko Kuroda indicated Monday that he is prepared to ease monetary policy further, but also acknowledged that negative interest rates could undermine confidence in Japan's banking system.
Meanwhile, the Australian dollar remained stronger, with AUD/USD up 0.57% at 0.7625.
The Aussie jumped around 1% overnight after the country’s central bank kept interest rates on hold and refrained from making any comments on the currency’s strength.
Sterling was also higher, with GBP/USD up 0.33% to 1.3347 a day after data showing that activity in Britain’s service sector rebounded strongly last month from a slowdown prompted by June's vote to exit the European Union.