The dollar was mixed on Tuesday as traders awaited the Federal Reserve's Jackson Hole Economic Policy Symposium later this week for further clues on U.S. interest rate policy.

A speech on Friday by Fed Chair Jerome Powell is this week's main focus, with little major economic data to drive market direction. Traders are tuned into whether Powell will push back against market pricing of a rate cut in September.

Traders ramped up bets on a rate cut at the Fed's September 16-17 meeting after a weak July jobs report, and as last month's consumer price inflation report showed limited upward pressure from tariffs.

But a hotter-than-expected July producer price reading has tempered some rate-cut expectations. Powell has said he is reluctant to cut rates due to an expected increase in inflation this summer from tariffs.

"Last week, when we had about 25 basis points priced in for September, and more than two cuts for the rest of the year, there was probably some risk that the Powell speech would disappoint those expectations if he wasn't clear enough in committing to a September cut," said Vassili Serebriakov, an FX and macro strategist at UBS in New York.

"Now that we're pricing in about 20 basis points for September and just slightly over 50 basis points for the rest of the year, I think the risks are much more balanced," Serebriakov added.

Traders are pricing in 54 basis points of cuts by year-end.

The Fed will also release minutes from its July 29-30 meeting on Wednesday, though they may offer limited insight as the meeting came before July's weak jobs report.

Data on Tuesday showed groundbreaking for new U.S. single-family homes and permits for future construction rose in July even as high mortgage rates and economic uncertainty continued to hamper home purchases.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, was last up 0.15% on the day at 98.27, with the euro down 0.12% at $1.1646.

Against the Japanese yen, the dollar weakened 0.22% to 147.54.

Currency moves have been relatively muted for the past few weeks following a steep drop in the dollar in the first half of the year.

"There's been a bit of de-risking in FX over the summer and now investors are just waiting for the more clear catalyst for the next move," said Serebriakov.

Source: Investing.com