The US dollar weakened at the start of the trading week as investors trimmed their bets that the Federal Reserve will raise interest rates in response to elevated inflation. The greenback has cut this year’s gains in half, although yields on Treasury securities have rocketed to levels unseen in decades.

The US Dollar Index (DXY), a measure of the buck against a weighted basket of currencies, fell 0.1% to 99.58, from an opening of 99.67. The index is up 1.35% year-to-date.

A disappointing July jobs report and softer inflation data forced investors to reconsider the path of monetary policy.

“We had a series of softer numbers in ‌the U.S., with payrolls and retail sales coming out soft. That’s going to reprice expectations to some degree about how much the Fed is going to tighten policy. The ​knee-jerk reaction of that is what is partly sending the dollar down,” said Kit Juckes, chief FX strategist at Societe ⁠Generale, according to CNBC.

Last week, inflation pressures slowed, with consumer and wholesale prices easing for the second consecutive month. At the same time, retail sales declined in July for the first time since October, a development that came days after the government reported that the economy lost 23,000 jobs last month.

As a result, traders pared their rate-hike bets and have made a rate pause their base-case scenario at the September Federal Open Market Committee policy meeting.

But while the dollar is weakening, US government bond yields are rocketing.

The primary ten-year benchmark rose to 4.72%. The 30-year yield reached 5.31% for the first time since June 2007. The two-year yield, which tracks Fed policy expectations, ticked up to around 4.18%.

Market watchers say the yields ran counter to the data, which should have pushed them lower. It could indicate that investors are seeking greater compensation for holding Treasury debt, especially as government bonds compete with corporate bond issuance in the artificial intelligence sector.

“What is notable today is not the existence of these pressures, but that they appear strong enough to overwhelm individual soft-data releases,” Anshul Pradhan, head of U.S. rates research at Barclays Capital, said in a note Monday. “Three independent releases argued for lower yields this month; long end yields moved higher anyway.”

The USD/CAD currency pair was little changed at 1.3873. The USD/JPY currency pair rose 0.1% to 159.46, from an opening of 159.30.