The dollar paused its rally on Tuesday, as traders reaffirmed their bets for a slew of Federal Reserve rate cuts this year on the belief that inflation in the U.S. is slowing sufficiently.

British employers raised pay and recovered some of their appetite for hiring in December, according to a survey that the Bank of England may see as another sign of lingering inflation pressure in the labour market.

The U.S. economy added far more jobs than expected in December, according to a new labor market report that could impact how Federal Reserve policymakers approach potential interest rate cuts this year.

U.S. employers hired more workers than expected in December while raising wages at a solid clip, casting some doubt on financial market expectations that the Federal Reserve would start cutting interest rates in March.

The latest government data on Friday showed the U.S. added 216,000 jobs in December, as the labor market settles back towards more normal levels following almost four years of upheaval caused by the COVID-19 pandemic.

U.S. manufacturers are still struggling to emerge from the prolonged slump that began in the middle of 2022 as the pandemic-driven surge in merchandise buying subsided and consumers reverted to spending on services.