LONDON, June 5 — The dollar edged up against major peers today, as markets priced in around a 1-in-4 chance of the US Federal Reserve raising benchmark rates this month after robust jobs data on Friday.

The dollar index — which tracks the greenback against six peers — came off the boil last week, after some Fed officials voiced a preference for a pause in rate hikes and after a breakthrough in US debt ceiling talks calmed market jitters.

Despite a surprisingly high payroll figure for May, indicating the US economy may still be running hot, analysts said the Fed may still have scope to pause rate rises as wage pressures eased and unemployment rose from a 53-year low.

Markets now put the probability of a 25 basis point hike at the meeting on June 13-14 at 27 per cent, down from 2-in-3 odds a week earlier.

The dollar index was last up 0.1 per cent on the day at 104.260.

US services data due later today could give further clues, though analysts said core inflation data due next week was more likely to move the needle.

"...the lack of other key inputs before next week’s CPI [inflation data] could keep the dollar capped,” currency analysts at ING said in a note.

"We think that, when adding the cooling off in wage inflation, and considering the diverging views within the FOMC (Federal Open Market Committee), the case for a pause at the 14 June meeting should prevail.”

The euro slipped 0.1 per cent to US$1.06930 (RM4.89), extending the previous session’s 0.5 per cent slide, with markets looking ahead to European Central Bank chief Christine Lagarde addressing a hearing in the European Parliament later today.

The dollar gained 0.3 per cent versus the yen at 140.340.

The Australian dollar dipped 0.3 per cent to US$0.65870, ahead of a decision by the central bank tomorrow on whether to raise rates that analysts said was on a knife-edge.

Meanwhile, the Turkish lira dropped more than 1 per cent, continuing its slide since President Tayyip Erdogan’s re-election.

The fall came despite the appointment of Mehmet Simsek as Turkeuy’s finance minister, who won markets’ confidence during previous stints in government between 2009 and 2018. — Reuters