The Dollar regained some of the losses it experienced last week on Monday as investors anticipated upcoming US inflation data, as a mixed payrolls report on Friday created uncertainty about the extent of a potential Federal Reserve rate cut next week.

Meanwhile, the Japanese Yen fell against the Dollar following a four-day period of gains, dropping 0.7% to 143.35 per Dollar after reaching a one-month high of 141.75 on Friday.

Attention has shifted to Wednesday's US inflation report, which is anticipated to be a key factor in influencing market expectations for the Fed's September meeting.

The Euro fell 0.3% to $1.1048, and the Pound declined 0.3% to $1.3083, its lowest level in over two weeks.

Meanwhile, the dollar index, measuring the currency against six rivals, rose 0.37% to 101.56, according to Reuters reports.

Friday's eagerly awaited US jobs data did not provide traders with clear guidance on whether the Fed would implement a standard 25 basis point rate cut or a larger 50 basis point cut at its 17th-18th September policy meeting.

Although employment growth in August was below expectations, the unemployment rate fell slightly and wage growth stayed strong. This suggested that while the US labour market is cooling, it is not cooling at a rate that would justify concerns about the economy's overall growth outlook.

“The initial relief rally for the US Dollar has been driven by the paring back of expectations for the Fed to deliver larger 50 bps rate cut at the next policy meeting,” said MUFG strategist Lee Hardman.

“At the same time, the US Dollar is deriving support from more risk-off trading conditions.”

As it stands, markets have fully priced in a 25-basis point cut next week, and around a 25% chance of a 50-basis point reduction.

Furthermore, the Euro weakened against the Dollar in anticipation of Thursday's European Central Bank (ECB) policy meeting. 

The ECB is widely anticipated to reduce rates by 25 basis points to 3.50%, following its initial rate cut of a quarter-point in June as part of its rate-cutting cycle.