The U.S. dollar stabilized on Tuesday, recovering slightly after recent losses driven by weaker-than-expected payroll data, as investors reassessed the outlook for Federal Reserve rate cuts amid signs of a slowing economy.

As of 04:15 ET (08:15 GMT), the U.S. Dollar Index, which measures the greenback against a basket of six major currencies, rose 0.2% to 98.765, rebounding from a one-week low touched earlier in the session.

The dollar had come under pressure following Friday’s disappointing July jobs report, which led markets to rapidly price in additional policy easing. According to the CME FedWatch tool, traders now see over a 90% probability of a rate cut at the Fed’s September meeting, up from 63% the previous week.

Goldman Sachs forecasts three consecutive 25-basis-point cuts beginning in September, with the possibility of a larger 50-basis-point reduction if labor market conditions deteriorate further. Supporting this view, San Francisco Fed President Mary Daly noted on Monday that softening job market data and subdued inflation risks could warrant more than two cuts before year-end.

Investors are also eyeing the ISM Services Index for July, due later today, which is expected to show a modest improvement and may offer short-term support for the dollar.

Euro Weakens on French Data; Tariff Concerns Persist

In Europe, the euro fell, with EUR/USD down 0.3% to 1.1544 after data showed France’s services sector contracted more sharply in July. The HCOB France Services PMI dropped to 48.5, from 49.6 in June, marking the fastest rate of contraction since April as political uncertainty and weak demand weighed on sentiment.

Attention now turns to the eurozone’s June Producer Price Index, expected to rise just 0.6% year-on-year, reinforcing expectations that inflation will remain below the European Central Bank’s 2% target.

“EUR/USD appears stable around the 1.1550 level. In the absence of significant drivers, it may continue to consolidate in this range. Should U.S. data disappoint, buyers are likely to emerge in the 1.1500–1.1520 zone,” analysts at ING commented.

Meanwhile, GBP/USD edged 0.1% lower to 1.3277, trading within a narrow range amid limited domestic catalysts.

Rupee Under Pressure on Tariff Threats; Yen and Yuan Steady

In Asia, USD/JPY rose 0.1% to 147.25 following stronger-than-expected Japanese services PMI data for July. AUD/USD also advanced 0.1% to 0.6468, while USD/CNY climbed 0.1% to 7.1856 despite upbeat Chinese services data.

USD/INR gained 0.2% to 87.800, reaching a record high earlier in the session. The Indian rupee came under renewed pressure after U.S. President Trump imposed 25% tariffs on Indian goods last week and threatened further penalties in response to India’s continued purchases of Russian oil.