SINGAPORE, May 27 Reuters The dollar made a steady start to the week on Monday, as investors were focused on U.S., European and Japanese inflation data to guide the global interest rate outlook.

Foreign exchange trade has been dominated by the hunt for carry in recent months, punishing lowrate currencies and supporting the dollar while U.S. data has blown hot and cold and dented policymakers39; confidence on the rates outlook.

Several major pairs have hugged tight ranges. The euro , which gained 0.9 on the dollar last week, was in the middle of a range it has held for more than a year at 1.0846.

Trading on Monday was thinned by holidays in Britain and the United States.

German inflation on Wednesday and euro zone readings on Friday will be watched for confirmation of a European rate cut that traders have pencilled in for next week.

Sterling was testing the top side of a range it has held this year at 1.2735. The Australian and New Zealand dollars have eased from recent highs, leaving the Aussie at 0.6637 and the kiwi at 0.6122 as markets have dialled back interest rate cut expectations for the U.S.

Friday39;s reading for the core personal consumption expenditures price index, the Federal Reserve39;s preferred inflation measure is expected to be steady monthonmonth.

The dollar had fallen back after data showed a slowdown in consumer price rises in April and confirming the trend could pull it lower still but the big picture is that inflation and inflation indicators…