The dollar stood near its lowest level in three months against a resurgent euro, and traders pared earlier bets the Federal Reserve may move soon to taper its stimulus though markets were not fully convinced that higher U.S. inflation is transient.
The dollar index, measuring the greenback against a basket of six currencies, was hovering at 90.045, a tad above a threemonth low of 89.646 set on Friday.
Minutes from the Feds April policy meeting released last week showed a sizable minority of policymakers wanted to discuss tapering bond purchase on worries that pouring more money to an economy on the mend could stoke inflation.
Still, Fed Chairman Jerome Powells repeated comments that it is not yet time to discuss a reduction in quantitative monetary easing has led many investors to believe it will be months before the central bank actually tweaks policy.
Inflation figures have been pretty strong but retail sales may be starting to slow down. And the economic outlook hinges on fiscal policy, which is still uncertain, said Shinichiro Kadota, senior currency strategist at Barclays.
The White House said on Friday it had pared down its infrastructure bill to 1.7 trillion from 2.25 trillion, with cuts to investments in broadband and roads and bridges, but Republicans dismissed the changes as insufficient for a deal.
With investors preoccupied with threats of accelerating inflation, U.S. PCE personal consumption expenditures data, due on Friday, is seen as one of the…