The U.S dollar inched higher against the euro on Monday but pared some early gains, as investors continued to digest last week’s strong U.S. employment report and speculated about when the Federal Reserve is likely to begin raising rates.
The dollar stabilized after a week of gains, with no major U.S. economic releases due this week and trading expected to be relatively light after the Independence Day holiday.
The dollar has gained and the Treasuries yield curve has flattened after data on Thursday showed nonfarm payrolls increased by 288,000 jobs last month and the unemployment rate fell to 6.1 percent from 6.3 percent in May.
The next major focus will be the releases of minutes from the Fed’s June meeting on Wednesday, which will be scoured for signs about when central bank members see an interest rate increase as likely.
“The discussion won’t reflect the strong bounce in nonfarm payrolls, but will serve as a reference as to what the internal debate is in the FOMC regarding the first rate hike,” said Martin Schwerdtfeger, a foreign exchange strategist at TD Securities in Toronto.
The dollar was last up 0.02 percent against the euro at $1.3596. It rose to $1.3601 earlier on Monday after German industrial output fell 1.8 percent on the month in May, its biggest drop in more than two years.