NEW YORK, Aug 11: The U.S. dollar remained steady on Tuesday, August 11, as traders awaited the highly anticipated consumer inflation report for July, which could influence near-term Federal Reserve policy decisions.

Following Friday's jobs report revealing an unexpected payroll decline, traders reduced their bets on a Federal Reserve rate hike in September. Fed funds futures now price in a 48% chance of a September increase, down from 58% a week earlier.

Currency strategist Eric Theoret of Scotiabank noted, “So long as this disinflationary trend continues, it's hard to make a case for rates to be going higher.” However, a resurgence in inflation could renew expectations for tightening, as price pressures remain above the Fed's 2% annual target.

Rising oil prices, driven by ongoing negotiations to reopen the Strait of Hormuz, have raised concerns about renewed inflationary pressures. Crude oil prices touched their highest level in over a week on Tuesday but pared gains amid mixed signals from talks between Oman and Iran and continued disruptions to Middle East energy flows.

On Monday, President Donald Trump responded to Iran's conditions for a peace deal by demanding Tehran pay compensation for those killed in wars, attacks, and protests—a move that may complicate efforts to reopen the strait.

Additionally, the U.S. and Japan coordinated last month to support the yen after it fell to a 40-year low against the dollar.

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