Investing.com - The euro was lower against the dollar on Monday after Friday’s strong U.S. employment report for December and the yen gave up overnight gains, but investors remained wary amid ongoing turmoil in Chinese financial markets.
EUR/USD slid 0.31% to 1.0892, still holding above Friday’s lows of 1.0801.
The single currency was steady against the yen, with EUR/JPY at 128.27, up from earlier lows of 127.63.
The yen gave up broad gains after China’s central bank moved to support the yuan, but another steep drop in Chinese shares overnight added to fears over the outlook for the world’s second largest economy.
Earlier Monday, the People’s Bank of China set the daily midpoint rate for the yuan higher against the dollar. It was the second day the bank guided the yuan stronger, following eight days of weaker guidance.
The move alleviated concerns over weakness in China’s currency, but shares in China tumbled 5% overnight after the latest inflation figures added to concerns over its economy.
The dollar added to gains against the yen, with USD/JPY rising 0.24% to 117.72 after falling to lows of 116.68 overnight, the weakest since August 24.
The greenback was also higher against the traditional safe haven Swiss franc, with USD/CHF at 0.9969, up from earlier lows of 0.9882.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.19% to 98.64.
Demand for the dollar continued to be underpinned following Friday’s robust U.S. jobs report for December.
The U.S. economy added 292,000 jobs last month, after increasing an upwardly revised 252,000 in November. Economists had forecast payrolls to rise by 200,000.
The unemployment rate held steady at a seven-and-a-half year low of 5% in December.
The report bolstered expectations that the Federal Reserve could raise interest rates at a faster pace this year. Higher U.S. interest rates would make the dollar more attractive to yield-seeking investors.