On Tuesday, the dollar held onto its gains, a day after investors cut its short bets against it on a rebound in U.S. bond yields to generate its second largest daily increase against the yen this year.

Positioning against the dollar has popped to record levels in recent months as feeble economic data and an imminent change of guard at the Federal Reserve has made markets advance bets that U.S. interest rates will not change anytime soon.

“Nothing fundamental has changed about the outlook for the dollar, namely that the market has become more sceptical about the Fed’s intention to raise rates in the near term and Thursday’s inflation data may bolster those bets,” stated Antje Praefcke, an FX strategist at Commerzbank AG.

The dollar index, which monitors the currency against a basket of six major rivals, was widely steady at 91.829, after it fell to a 2-1/2-year low of 91.011 on Friday.

The index had gained on Monday as 10-year U.S. Treasury yields hiked 8 basis points to 2.125 percent, their largest daily in nearly two months. Yields extended gains on Tuesday.

Despite the dollar rebound, net short bets against the currency remain near their highest levels since January 2013 as predictions of Fed tightening have dropped.

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Currency markets now expect only one U.S. rate increase by the end of 2018, in comparison with estimates a few weeks ago of a hike before the end of this year.

U.S. inflation data is set to be released on Thursday is unlikely to display a significant increase in price pressures, with the August reading estimates at 1.6 percent on an annual basis compared to 1.7 percent in July. The Fed has a 2 percent inflation target.

The dollar was steady at 109.57 yen after gaining 1.4 percent on Monday, its largest one-day increase since mid-January.

It had previously dropped to a 10-month low of 107.320 yen on Friday, when Hurricane Irma had its eyes set on Florida and as financial markets prepared for the possibility of another missile or nuclear test to mark North Korea’s founding day on Sept. 9.