SINGAPORE, Aug 7 Reuters The dollar was on the defensive on Monday after a mixed U.S. jobs report provided little directional conviction and as market focus turned to inflation data from the world39;s two largest economies due this week.

The U.S. economy added fewer jobs than expected in July, data on Friday showed, but it recorded solid wage gains and a decline in the unemployment rate.

While the dollar fell to a oneweek low against a basket of currencies in the aftermath of the data, its losses were capped as the report pointed to a stilltight labour market, suggesting the Federal Reserve may need to keep rates higher for longer.

The U.S. dollar index was last 0.08 higher at 102.14, edging away from Friday39;s low of 101.73.

Sterling fell 0.11 to 1.2737, while the euro lost 0.14 to last stand at 1.0994.

There was a narrative in there for everyone, depending on your bias, said Pepperstone39;s Head of Research Chris Weston of the jobs report.

We are seeing a cooling of the labour market, but it39;s not collapsing. It39;s doing what we hoped it would do.

U.S. inflation data is due on Thursday, where expectations are for core inflation to have risen 4.7 on an annual basis in July.

It39;s hard to see the pullback being big across the dollar pairs, because fundamentally the U.S. has still got the best growth, you got a central bank which is still very much data dependant, and I think there are risks this week that the CPI number comes out above expectations, said…