LONDON: The dollar was stable against most currencies on Monday as concerns about the pandemic made investors cautious, while they also waited for more clues about the global economic recovery before making their next moves.

With markets hyper-sensitive to any talk of early tapering, U.S. inflation data on Tuesday will be closely watched ahead of a testimony by Federal Reserve Chair Jerome Powell on Wednesday and Thursday.

Meanwhile, the People's Bank of China's surprise policy easing on Friday, aimed at boosting the post-COVID economic recovery, failed to provide lasting momentum.

"While welcome, the move also signals that the authorities are concerned about China's growth prospects, so it's mixed news", said Marshall Gittler, head of investment research at BDSwiss Holding.

Yuan rebounds from 2-1/2-month low, market shifts attention to Q2 GDP data

The yuan was slightly firmer at 6.4735 per dollar as Chinese shares and bonds rose.

Economists polled by Reuters expect U.S. consumer price for June to have risen 0.4% from May and 4.0% from a year earlier after two straight months of sharp gains in prices.

Any signs that inflation could be more persistent than previously thought could fan expectations the Fed may exit from current pandemic-era stimulus earlier, supporting the dollar against other major currencies.

Conversely, more benign data could lead investors to think the U.S. central bank can afford to maintain an easy policy framework for longer, encouraging more bets on risk assets, including risk-sensitive currencies.

At 0821 GMT, the dollar was down just 0.01% against a basket of currencies.

The euro was flat against the greenback.

Although few investors expect the global economic recovery to be derailed by fresh waves of COVID-19 infections, vulnerable currencies such as the tourism-exposed Thai baht have taken a hit.

The baht was trading above Friday's low but has lost about 5% against the dollar in a month and on Monday Thailand's central bank warned the economy may miss its projections as virus curbs hit growth.

Meanwhile, Japan's safe-haven yen stood at 110.07 yen per dollar, off Thursday's one-month high of 109.535.

Cryptocurrencies were little moved, with bitcoin at $34,431 and ether at $2,154.