Investing.com - The dollar rose against the other major currencies on Tuesday, recovering from the previous session's steep losses, although concerns over the impact of slowing growth in China on the global economy continued to weigh on investor confidence.
USD/JPY was last up 1.31% to 119.95, recovering from Monday’s lows of 116.81. The pair ended that session down 2.9%, the largest one-day decline in five years.
The dollar found some support as Japanese stocks regained ground in early trade, dampening demand for the yen.
But concerns over whether a free fall in China’s stocks will make the world’s second-largest economy weaker persisted. Shares in Shanghai fell around 7% on Tuesday, one day after the worst trading session since 2007, dubbed ‘Black Monday’.
The turmoil in markets began when China unexpectedly devalued the yuan on August 11, sparking fears that the economy may be in a worse condition than previously thought.
Japanese Finance Minister Taro Aso said on Tuesday he hoped Beijing would take action to stabilize its economy and added that the government had no immediate plans to implement fresh economic stimulus measures.
EUR/USD declined 0.69% to 1.1537, off Monday's eight-month peak of 1.1713.
The single currency has been boosted as investors fled to the relative safe-haven currencies amid intense volatility in markets.
Demand for the euro has also been boosted by investors borrowing the low-yielding currency to fund investment in risk assets, known as ‘carry trade’.
Elsewhere, the dollar was lower against the pound, with GBP/USD up 0.12% to 1.5795 and higher against the Swiss franc, with USD/CHF jumping 1% to 0.9395.
The Australian and New Zealand dollars rose off the previous session's six-year lows, with AUD/USD up 0.70% at 0.7206 and with NZD/USD climbing 0.54% to 0.6515.
Meanwhile, USD/CAD slid 0.84% to 1.3176, pulling away from an 11-year high of 1.3298 hit overnight.
The commodity-linked loonie remained under pressure as China's troubles also contributed to the recent rout in oil prices. Oil prices were slightly higher on Tuesday, but remained not far from six-and half year lows.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.39% at 93.75, off Monday’s eight-month lows of 92.52.