The dollar remained moderately higher against the other major currencies in subdued trade on Monday, after China’s central bank unveiled fresh measures to curb speculation and also guided the yuan higher.
Trading volumes were expected to remain thin on Monday with U.S. markets closed for the Martin Luther King Day holiday.
USD/JPY rose 0.25% to 117.34, off 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.
EUR/USD fell 0.18% to trade at 1.0897.
Markets were jittery, 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 oil rout continued to weigh on the commodity-related Canadian dollar, amid mounting expectations that the Bank of Canada could ease monetary policy further at its upcoming meeting on Wednesday in response to low oil prices.
USD/CAD was down 0.31% at 1.4496, after rising to nearly 13-year highs of 1.4581 overnight.
The Australian dollar edged higher, with AUD/USD up 0.32% at 0.6885, while NZD/USD held steady at 0.6456, close to Friday’s three-month trough of 0.6378.
Elsewhere, the dollar was lower against the pound, with GBP/USD up 0.27% to 1.4297, off Friday’s five-year lows of 1.4247, and was higher against the Swiss franc, with USD/CHF gaining 0.37% to 1.0043.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.10% at 99.08.