The dollar index extended its recent retreat on Tuesday, notching up its biggest three days of losses since mid-December as the market braced for signals this week that the Fed is preparing to cut interest rates at next month's meeting.

Investors appear particularly concerned that Wednesday's release of revisions to U.S. jobs data for the 12 months through March this year could show the labor market was much less robust than earlier thought.

That report could shape investor expectations for how overtly Fed Chair Jerome Powell might hint at monetary easing when he speaks on Friday at the Jackson Hole symposium.

Fed Governor Michelle Bowman said she remains cautious about any shift in the U.S. central bank's policy because of what she sees as continued upside risks for inflation, warning that overreacting to any single data point could jeopardize the progress already made.

U.S.
Treasury yields fell 4-6bp across maturities, with the 2s-10s curve steepening 1.37bp to a slightly less inverted -18.36bp.

The S&P 500 was little changed, erasing earlier gains and taking a breather following an eight-session rebound from this month's sharp selloff.

WTI was down 0.53% after earlier falling to its lowest in nearly two weeks as Middle East supply concerns eased after Israel accepted a proposal to tackle disagreements blocking a ceasefire deal in Gaza, and as economic weakness in China weighed on fuel demand.

Copper fell 0.65%, giving back gains that had taken it to its highest in nearly three weeks, after a short-covering rally ended and as demand concerns remained in top consumer China.

Gold held onto gains of 0.39% but had pulled back from the highs of its latest advance into record territory, though it remained above the closely watched $2,500 level with the help of the weaker dollar.

Heading toward the close: EUR/USD +0.32%, USD/JPY -0.77%, GBP/USD +0.27%, AUD/USD +0.16%, USD/CHF -0.81%, EUR/JPY -0.46%, GBP/JPY -0.52%, AUD/JPY -0.74%.

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