Investing.com - The dollar was lower against the euro and the yen on Monday as renewed weakness in equities markets overnight weighed, but losses were held in check by hopes that the Federal Reserve may still raise interest rates as soon as next month.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, slid 0.26% to 95.89, but remained well above the eight-month trough of 92.52 set last Monday.
The dollar found support after Fed Vice Chairman Stanley Fischer said Friday it was still too early to decide whether to raise interest rates from near zero at the bank’s September meeting.
EUR/USD rose 0.38% to 1.1228 from 1.1186 late Friday, but was still well below last week’s peaks of 1.1713.
USD/JPY was down 0.43% to 121.17, off Friday’s highs of 121.73.
Chinese shares turned lower on Monday after a 10% rally in the previous two sessions, amid renewed concerns over the health of the world’s second-largest economy, while shares in Hong Kong were also weaker.
Demand for the euro and the yen was boosted as heightened risk aversion underpinned demand for the low-yielding currencies to fund investment in risk assets.
Investors were looking ahead to Friday’s U.S. jobs report for August, which could help to provide clarity on the likelihood of a near-term interest rate hike.
Markets were also awaiting Chinese data on Tuesday which was expected to show that the rate of economic growth is continuing to slow.
The Australian and New Zealand dollars were also lower, with AUD/USD down 0.25% to 0.7148 and NZD/USD losing 0.5% to trade at 0.6425.