The dollar dipped against the euro and yen on Tuesday as traders waited on 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 otherwise drive market direction, with traders tuned into whether Powell pushes 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 jobs report for July. Last month’s consumer price inflation report also showed limited pass through from tariffs, adding to the move.

But a hotter-than-expected producer price reading for July 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 currently 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 that 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 down 0.02% on the day at 98.10, with the euro up 0.09% at $1.1671.

Against the Japanese yen, the dollar weakened 0.15% to 147.64.

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.

Traders are also focused on any developments in peace talks to end the Russia-Ukraine war.

Ukraine and its European allies have been buoyed by U.S. President Donald Trump’s promise of security guarantees for Kyiv to help end the war in Ukraine but face many unanswered questions, including how willing Russia will be to play ball.

Ukrainian President Volodymyr Zelenskiy hailed Monday’s summit at the White House with the U.S. president as a “major step forward” towards ending Europe’s deadliest conflict in 80 years and towards setting up a trilateral meeting with Russia’s Vladimir Putin and Trump in the coming weeks.

In cryptocurrencies, bitcoin fell 1.66% to $114,603.

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(Reporting by Karen Brettell; Additional reporting by Jaspreet Kalra; Editing by Sharon Singleton)