By Elizabeth Howcroft

LONDON (Reuters) – The dollar slipped on Monday, falling below the 15-month highs it hit after Friday’s jobs data, as investors reassessed rate hike expectations and central banks’ tolerance of inflation.

Last week, the U.S. Federal Reserve stuck to its view that current high inflation is expected to be transitory.

The Bank of England surprised the market by keeping rates on hold and, earlier in the week, the Reserve Bank of Australia (RBA) also pledged to be patient with policy.

At 1257 GMT, the dollar index was down 0.1% on the day, at 94.176, having fallen since it hit its highest level in more than a year on Friday following stronger-than-expected payrolls data.

“The market’s selling dollars because the central banks are not going to hike quite as quickly as we all previously thought,” said Neil Jones, head of FX sales at Mizuho.

Jones said that less rapid rate hikes benefits risk assets such as stocks, which are inversely correlated with the U.S. dollar.

The next test of the Fed’s wait-and-see approach to inflation will be U.S. CPI data due on Wednesday.

“The tightening labour market will keep pressure on the Fed to keep tightening policy going forward, and speed up rate hike plans if labour force participation does not improve as expected,” MUFG strategist Lee Hardman wrote in a note to clients.

Commodity Futures Trading Commission data showed speculators scaled back their net long position on the dollar for the fourth week running in the week to Nov. 2.

Federal Reserve Vice Chair Richard Clarida will speak about inflation and monetary policy later in the session.

“We have heard a few Fed hawks questioning the need for patience when it comes to tightening, but similar remarks from centrists like Clarida would certainly send U.S. short-term rates and the dollar higher,” ING FX strategists wrote in a note to clients.

The Australian dollar, which is seen as a liquid proxy for risk appetite, was up 0.1% on the day at $0.7408.

The New Zealand dollar was 0.6% higher at $0.7163, after Prime Minister Jacinda Arden announcing that lockdown measures will likely be phased out by the end of the month.

New Zealand will ease COVID-19 restrictions in Auckland from Wednesday, as vaccination rates rise.

The euro was a touch higher, up 0.1% at $1.1578.

Euro zone inflation will ease next year and remains too weak in the medium term, European Central Bank chief economist Philip Lane told a Spanish newspaper, repeating the bank’s long-standing message that high price growth is temporary.

Britain’s pound was up 0.4% at $1.3537, recovering from the five-week low it hit last week after the Bank of England meeting.

Elsewhere, China’s export growth beat economists’ forecasts in October, while imports missed expectations, resulting in a record trade surplus.

But the yuan was steady versus the dollar, holding just under the key 6.4 level.

Traders are also looking ahead to Chinese producer and consumer price data due on Wednesday, with annual producer price growth seen surging to 12% in perhaps a harbinger of further price pressure to come through global supply chains.

“While the strong trade surplus this year should have somewhat supported the CNY exchange rates, the overall theme for USD-CNY is the stability,” Commerzbank senior economist Hao Zhou wrote in a client note.

In cryptocurrencies, bitcoin was up 4.2% at around $65,937 — not far from a new all-time high — while ether hit a record peak of $4,768.07 overnight

(Reporting by Elizabeth Howcroft; Editing by Subhranshu Sahu and Ken Ferris)