Investing.com - The dollar regained some ground against the safe haven yen on Monday as China’s yuan gained after the central bank unveiled fresh measures to curb speculation and also guided the currency higher.
USD/JPY rose 0.26% to 117.34, up from overnight lows of 116.73 and Friday’s four-and-a-half month trough of 116.50.
The People's Bank of China said Monday it is to start implementing a reserve requirement ratio on offshore banks' domestic deposits, a move intended to deter offshore speculators betting that the currency will continue to fall.
The PBOC also set a firmer mid-point rate for the yuan than on Friday.
China's currency has fallen around 5% against the dollar since August, sparking fears that the slowdown in the world’s second-largest economy is deeper than had been feared.
The low-yielding euro was weaker against the dollar, with EUR/USD sliding 0.29% to 1.0884.
Investors remained cautious as oil prices fell below $28 per barrel on Monday, the lowest level in 12 years.
The renewed fall in oil prices came as Iranian exports were set to resume after Western sanctions were lifted, fueling fears over increased supplies amid a global supply glut and slowing demand.
The Canadian dollar fell to fresh 12-year lows against the greenback, with USD/CAD hitting highs of 1.4606 before easing back to 1.4512.
The loonie, as the Canadian dollar is also known, was hit by mounting expectations that the Bank of Canada could ease monetary policy further at its upcoming meeting on Wednesday in response to low oil prices.
Sterling also remained under pressure, with GBP/USD falling to fresh five-and-a-half-year lows of 1.4248 before pulling back to 1.4304.
The pound remained on the back foot amid concerns over the U.K. economic outlook and uncertainty over a upcoming referendum on Britain’s membership of the European Union.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.16% to 99.15.
Volumes looked set to remain thin on Monday with U.S. markets closed for the Martin Luther King Day holiday.