Dollar bounces from three-week low, yuan slides after PBOC move

The dollar rose in early Monday trading as risk currencies fell after talks about a U.S. stimulus aid package resumed. The yuan fell after the Chinese central bank aimed to curb the currency’s strength.

The euro fell 0.1% to $1.1817, while the Aussie lost 0.3% to $0.7222. The yen steadied at 105.52 against the dollar.

The dollar index climbed to 93.108, recovering from Friday’s near-three-week low of 92.997. It suffered its steepest drop in six weeks on Friday on hopes that a new U.S. fiscal aid would be agreed on.

President Donald Trump offered a $1.8 trillion coronavirus relief aid in talks with House Speaker Nancy Pelosi.

In offshore trade, the Chinese yuan fell after the People’s Bank of China said it will lessen the reserve requirement ratio for financial institutions participating in foreign exchange markets.

The yuan hit a 17-month high on Friday in onshore and offshore trade after gaining over 6% on the dollar since late May. The Chinese currency last stood at 6.7171 on the dollar in offshore trade, down 0.4%.

The pound traded at $1.3035 after hitting a one-month high of $1.3050 on Friday.