The dollar is now about 3% off its highs in early May. As a holiday-shortened week starts, the dollar could hand back a little more of its recent strength, although strong US data later in the week should limit the extent of the greenback's downside, economists at ING report.

DXY can continue to drift down to the 101.00 area

“US holiday-thinned trading should keep FX subdued today, but some modest reopening in China and some healthy equity gains should maintain the slightly softer dollar bias for the next few days.”

“DXY is undertaking a slightly deeper correction than we thought and can continue to drift down to the 101.00 area.”

“Friday's release of May Nonfarm Payrolls will have an important say for the Fed. We look for another strong set of numbers, which should prove supportive for both US yields and the dollar.”