Dollar jittery as market eyes CPI data [Video]

The euro held steady against the dollar in skittish trading on Monday as investors awaited U.S. inflation data later this week, while the Australian and New Zealand dollars rallied after China pledged an “appropriately loose” monetary policy next year.

While markets have priced in a quarter-point rate cut by the U.S. Federal Reserve next week as a near certainty, investors are waiting for U.S. consumer price data on Wednesday.

“The move higher in unemployment that we saw in November, that really just cements the case for a 25-basis point cut next Wednesday,” said Michael Brown, senior research strategist at Pepperstone. “Unless we get a really hot inflation number, but that’s certainly not the base case.”

“The Fed are much more focused at this moment in time on the labor market as opposed to developments with regards to inflation,” he added.

Data on Friday showed that U.S. job growth surgedin November, but a rise in the unemployment rate to …