The dollar was broadly steady in early Monday trading, with traders betting that U.S. inflation, which may have stabilized enough, will encourage the Federal Reserve to cut interest rates later in 2024.
The euro also steadied ahead of an expected interest rate cut from the European Central Bank this week.
The dollar posted its first monthly decline this year in May as expectations shifted to the timing and scope of the US central bank's interest rate cut, with market participants expecting a 37 basis point cut this year.
Data released Friday showed the personal consumption expenditures price index rose 0.3 percent in April, matching the unrevised increase in March. Traders now see about a 53 percent chance of a rate cut in September, compared with 49 percent before the data.
Inflation data continues to show that price pressures remain above the Federal Reserve's 2% target, with the personal consumption expenditures index rising 2.7% on an annual basis in April, the same rate as in March, leaving market participants uncertain that interest rates will be cut more than once in 2024.
The dollar index, which measures the greenback against six major currencies, was at 104.58 on Monday. The index fell 1.56 percent in May but is up 3 percent for the year.
The pound rose 0.04 percent to $1.2748, while the euro was last at $1.08555 ahead of the European Central Bank's monetary policy meeting on Thursday, when the central bank is likely to cut interest rates.
Traders expect the European Central Bank to cut interest rates by 57 basis points this year.
The Japanese yen fell slightly to 157.42 against the dollar on Monday, remaining close to a four-week low of 157.715 per dollar touched last week.
