Dollar steadies before U.S. jobs data; euro pressured by French turmoil

The U.S. dollar edged higher Tuesday, stabilizing after a slide to seven-week lows as traders looked ahead to key labor and inflation data expected to lock in a Federal Reserve rate cut next week.

At 04:15 ET (08:15 GMT), the Dollar Index rose 0.1% to 97.447, bouncing slightly after recent weakness driven by signs of a cooling U.S. labor market.

Jobs revisions, inflation in focus
Friday’s payrolls report showed sharply weaker hiring and unemployment at a nearly four-year high. Later Tuesday, the Labor Department will release preliminary benchmark revisions, with economists bracing for a potential 800,000-job cut to historical figures. Inflation data due later this week is also expected to show sticky consumer prices, with headline CPI seen rising to 2.9% in August.

The Fed meets next week and is widely expected to resume cutting rates after holding steady this year.

Euro slips on French political strife
EUR/USD fell 0.1% to 1.1750 after France’s parliament toppled the government on Monday over a contentious debt-reduction plan, intensifying political instability in the eurozone’s second-largest economy. The ECB is expected to hold rates unchanged Thursday.

GBP/USD edged up 0.1% to 1.3560, extending gains as the dollar remains soft.

Yen volatile on political shake-up
USD/JPY slipped 0.3% to 147.07 after sharp swings Monday, following Japanese Prime Minister Shigeru Ishiba’s unexpected resignation. The turmoil is expected to delay further Bank of Japan rate hikes.

Yuan and Aussie firm
USD/CNY fell 0.1% to 7.1270 after the People’s Bank of China set its strongest midpoint in 10 months, reinforcing expectations Beijing is supporting the yuan. AUD/USD climbed 0.3% to 0.6609, its highest in seven weeks, even as domestic consumer sentiment weakened in September.