The US dollar is starting the brand new trading week on a somewhat cautious note after the previous session’s employment release report sent mixed signals through financial markets about Fed tapering stimulus anytime soon. At the time of writing, the US dollar index DXY is trading at around 92.32.

Although the US economy saw a larger than expected jump in new jobs added, 850k vs. 700k forecast, the overall unemployment rate also ticked higher during June. Instead of falling to 5.7% as anticipated by economists, the unemployment rate rose from 5.8% in May to 5.9% in June, underscoring the Fed’s warnings about the labor market conditions remaining well below pre-pandemic levels even as the US economic recovery progresses at a solid pace.

The release of the data drove a sudden weakness in the US dollar, causing it to weaken against riskier commodity currencies like the AUD and NZD in the previous session, although it is holding steady for now. In early trading during the Asian session, the greenback also managed to regain some strength against safe haven Japanese yen while trading mostly unchanged against the common currency.

The much awaited non-farm payrolls report did little to sway the markets either way about the Fed’s position on whether it would start winding down its monetary stimulus efforts sooner than previously planned. Now, investors are likely to train their attention towards the upcoming Jackson Hole symposium due next month for clues on the central bank’s plans.

However, before that, we could see some volatility in the US dollar on the release of the latest FOMC meeting’s minutes this week. The minutes could shed some more light into the Fed’s recent hawkish shift, and will be closely monitored for insights on policymakers’ take on inflation.