WASHINGTON (dpa-AFX) - The U.S. dollar weakened against major currencies on Monday amid rising concerns about the outlook for global economic growth due to an escalation in U.S.-China trade war.
Meanwhile, the Chinese currency yuan fell below the sensitive level of seven against the greenback, amid speculation the Chinese central bank was depreciating its currency to counter the Trump administration's latest tariff threat.
Last week, the U.S. imposed a 10% tariff on $300 billion of Chinese goods from next month. China has vowed that it would initiate countermeasures to the U.S. decision and this has further widened the rift between the world's two largest economies.
According to a report released by the Institute for Supply Management today, growth in U.S. service sector activity unexpectedly slowed in the month of July.
The ISM said its non-manufacturing index fell to 53.7 in July after dropping to 55.1 in June.
With the unexpected decrease, the non-manufacturing index slid to its lowest level since hitting 51.8 in August of 2016.
The dollar index dropped to a low of 97.42 around early afternoon, but regained some lost ground as the day progressed and was last seen hovering around 97.55, still trailing its previous close by more than 0.5%.
Against the Euro, the dollar slipped to 1.1214 and subsequently edged up to 1.1202, down more than 0.8% from last week's close.
According to the survey data from the behavioral research institute Sentix, Euro area investor confidence deteriorated sharply in August to its lowest level in nearly five years, amid a steep drop in the current situation assessment and expectations.
The investor confidence index of the survey tumbled to -13.7 from -5.8 in July, marking its lowest level since October 2014. Economists had forecast a score of -7.
The current situation index dropped to -7.3 from 1.8 in the previous month. The latest reading was the lowest since January 2015.
Against Pound Sterling, the dollar strengthened to 1.2140 after having slid earlier in the day on data showing an improvement in the UK service sector growth in July.
The dollar was down 0.6% at 105.95 yen. Survey results from IHS Markit showed Japan's service sector began the third quarter with a moderate growth pace in July. The Jibun Bank services Purchasing Managers' Index fell slightly to 51.8 in July from 51.9 in June.
Against the loonie, the dollar was up marginally at 1.3215. Against the Aussie, the greenback shed 0.63% at with the pair trading at 0.6758.
The Swiss franc rose nearly 1% against the dollar. The Dollar-franc pair was quoting at 0.9734.
Strong retail sales data drove the franc higher. Data released by the Federal Statistical Office showed Switzerland's retail sales rose a working day adjusted real 0.7% year-on-year in June, after a 1.1% decline in May.
On a month-on-month basis, retail sales were up 1.5% in June, reversing a 1% fall in the preceding month. In nominal terms, retail sales rose 0.7% annually in June and increased 1.4% a month ago.
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