SINGAPORE, Sept 10 Reuters The dollar was steady on Tuesday and the yen inched away from onemonth highs in cautious trading as investors braced for U.S. inflation data and reassess expectations of a large interest rate cut from the Federal Reserve next week.

A mixed labour report on Friday failed to make a clearcut case on whether the Fed would deliver a regular 25 basis point bps rate cut or an outsized 50 bps one at its Sept. 1718 policy meeting.

Traders are now waiting on Wednesday39;s U.S. consumer price index report for further policy clues although the Fed has made it clear employment has taken on a greater focus than inflation. The headline CPI is expected to have risen 0.2 on a monthonmonth basis in August, according to a Reuters poll, unchanged from the previous month.

A weakerthanexpected report could bolster market expectations of a 50 bps cut, but a steady reading may leave the 25 bps versus 50 bps debate unresolved, according to Charu Chanana, head of currency strategy at Saxo.

Overall, the USD is expected to trade sideways to higher, as current Fed easing expectations still appear excessive.

China39;s yuan eased slightly Tuesday, but losses were capped by betterthanexpected export data.

Imports, however, missed forecasts and grew just 0.5. That follows lowerthanexpected inflation data published on Monday, highlighting still weak domestic demand.

Investor focus will also be on the highly anticipated televised U.S. presidential debate later on Tuesday…