The dollar traded near its 3-1/2-week lows against a currency basket on Monday after data last week showed slower-than-expected wage growth.
The data showed average U.S. hourly earnings gained five cents, or 0.2% in June after increasing 0.3% in May.
Meanwhile, nonfarm payrolls rose by a stronger-than-expected 213,000 in June, although its impact on currencies seems to be limited.
“U.S. wages did not increase so substantially, so there won’t be a rapid pickup in the pace of long-term interest rate hikes,” said Yukio Ishizuki, senior currency strategist at Daiwa Securities in Tokyo.
“If U.S. long-term interest rates don’t rise, there is less support for the dollar-yen.”
China’s foreign exchange reserves unexpectedly rose $1.51 billion in June to $3.112 trillion, central bank data showed on Monday, compared with a drop of $14.23 billion in May and the expectation of a drop of $10.6 billion in June to $3.10 trillion.
The trade dispute between the U.S. and China remained in focus, as the U.S. tariffs on $34 billion worth of Chinese goods came into effect on Friday. Trump told reporters that another $16 billion are expected to go into effect in two weeks and that he is considering imposing additional tariffs on $500 billion in Chinese goods if Beijing retaliates.
In response, China followed up by imposing duties on the same value of U.S. products.
The heightened Sino-U.S. trade tensions have sparked concerns of capital outflows from China and were cited as a headwind for the Chinese currency.
Elsewhere, The AUDUSD pair rose 0.4% to 0.7460, to reach its highest level since mid-June.