May 28 Reuters The dollar edged down on Tuesday, but remained in tight ranges against peers, ahead of key inflation data from major economies this week that could inform the global interest rate outlook.

The greenback was also on the verge of its first monthly decline in 2024.

A backdrop where the Federal Reserve can start cutting rates this year, even in December, is consistent with further dollar weakness, said Athanasios Vamvakidis, global head of forex strategy at BofA, who mentioned some weakness in U.S. economic data and recent stronger than expected figures from the euro zone as the main drivers of the dollar slowdown.

He also highlighted that the Fed had pushed back against speculation about possible rate hikes, preventing the dollar from appreciating further.

Markets are currently more than fully priced for a U.S. rate cut in December. They also discount an 80 chance of such a move in November and a 60 chance in September.

Against a basket of currencies, the dollar was down 0.11 to 104.44, for a 1.7 decline on a monthly basis.

The euro was up 0.16 to 1.0876 despite some dovish comments from European Central Bank ECB policymakers on Monday and data showing German business morale stagnated in May.

ECB39;s Francois Villeroy de Galhau confirmed market expectations that, barring major surprises, a first rate cut next week is a done deal. But investors have recently updated their bets on future ECB moves, pricing in less than a cut in every quarter in 2024 and…