Investing.com - The dollar rose against its rivals Monday, but gains were capped as the euro eased from a 13-month low, despite a fresh rout in the Turkish lira.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.08% to 96.27.
Bargain hunters helped the euro claw back some of its losses against the dollar following an earlier rout after the single currency hit a 13-month low, as worries mount about Turkey's economic stability.
Turkey's central bank's efforts to allay investor worries on Monday were not met with much enthusiasm. Turkey's central bank said it would provide as much liquidity as necessary to the country's bank as it cut lira and foreign currency reserve requirements for Turkish banks.
The fresh wave of selling seen in the lira comes amid growing investor fears that emerging-markets reliant on foreign debt such as South Africa and Indonesia may struggle to finance growth in the wake of rising U.S. interest rates, which tends to lift the dollar.
The South African rand and Mexican peso traded lower against the greenback.
The lira’s collapse “couldn’t have come at a worse time, when investors are already skittish,” said Kerry Craig, global market strategist at J.P. Morgan Asset Management.
More than 90% of traders expect the Federal Reserve to raise rates as soon as September, with another rate hike seen in December, according to Investing.com's Fed Rate Monitor tool.
Still, the greenback's advance was kept in check somewhat by an uptick in demand for safe-haven currencies like the yen and Swiss franc.
USD/JPY fell 0.16% to 110.63, while USD/CHF fell 0.12% to 0.9940.
GBP/USD fell 0.16% to $1.2750 on investor fears that Britain's departure from the European Union will be fractious, with Brexit talks set to resume this week after a summer break.
USD/CAD rose 0.06% to C$1.3150 as falling oil prices continued to weigh on the oil-price-sensitive loonie.