Investing.com - The dollar moved higher against the other major currencies on Thursday, as market turmoil sparked by the devaluation of the yuan in China began to subside and investors returned their attention to a potential U.S. rate hike in September.
EUR/USD slid 0.36% to 1.1118.
The yuan weakened slightly on Thursday, but the rate of the decline slowed after China's central bank said there was no basis for further depreciation in the currency, given China's strong economic fundamentals.
The yuan has fallen almost 5% against the dollar this week after China devalued its currency in a surprise move on Tuesday in a bid to shore up growth in the flagging economy.
The People’s Bank of China has described the move as a “one-off depreciation”, based on a new way of managing the exchange rate that better reflected market forces.
Sentiment on the dollar remained fragile however, as investors wondered if the Federal Reserve could postpone rate hikes as the decline in the yuan fueled concerns over global inflation expectations and the outlook for growth in China.
The dollar was higher against the yen, with USD/JPY up 0.29% to 124.42, but remained below Wednesday’s one-month peak of 125.27.
Data on Thursday showed that Japan's core machinery orders dropped 7.9% in June, compared to expectations for a decline of 5.6%, after a 0.6% rise the previous month.
Elsewhere, the dollar was steady against the pound, with GBP/USD at 1.5625 and higher against the Swiss franc, with USD/CHF rising 0.25% to 0.9778.
In Switzerland, data showed that producer prices fell by 0.3% in July, confounding expectations for a 0.2% downtick, after a 0.1% slip in June.
The Australian and New Zealand dollars were lower, with AUD/USD down 0.52% to 0.7339 and with NZD/USD declining 0.69% to 0.6575.
The Melbourne Institute earlier reported that its inflation expectations for the next 12 months in Australia ticked up to 3.7% in July from 3.4% the previous month.
The greenback edged higher against the Canadian dollar, with USD/CAD up 0.17% at 1.3001.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.30% at 96.57, off Wednesday's one-month lows of 95.94.