The U.S. dollar came under some pressure after data showed U.S. job growth slowed in July on Friday, while slipping against the yuan after the Chinese central bank acted to stabilize the currency by stemming speculation against it.
The dollar eased against a basket of currencies after the U.S. government reported a braking of domestic job growth, as employment in the transportation and utilities sectors fell.
Data, however, also showed a drop in the unemployment rate suggesting that the labor market was tightening.
The Chinese currency rebounded from a 15-month low hit earlier in the session, after China's central bank said it would set a forward reserve requirement ratio of 20 percent - up from an earlier zero - from Monday for financial institutions settling foreign exchange forward yuan positions.
The action will make shorting the yuan more expensive.
China's offshore yuan has weakened in recent months, as investors sold the currency and rushed into dollars on worries that a trade conflict between Washington and Beijing would damage the Chinese economy.
"Traders playing chicken against the Peoples Bank of China got hit by a truck this morning," said Karl Schamotta, a strategist at Cambridge Global Payments in Toronto.
The Chinese currency has tumbled about 10 percent since early April in offshore markets as investors speculated that its weakness would be encouraged by the People's Bank of China to counter the impact of U.S. tariffs on its exports.
China on Friday announced retaliatory tariffs on $60 billion worth of U.S. goods, and warned of further measures, signaling that it will not back down in a protracted trade war with Washington.
The dollar was 0.1 percent lower against the offshore yuan .
"The fact that China is stepping in to stabilize currency markets right now is suggestive of a bit of a rebound in global risk assets, emerging market currencies in particular," said Schamotta.
He said of the U.S. employment numbers, "It's a fairly strong report on balance. I don't think it is going to adjust the Federal Reserve's policy path in any material fashion."
The Fed is currently expected to raise rates two more time this year.
The dollar index, which measures the greenback against a basket of six other currencies, was down 0.05 percent at 95.11. The index is up about 3 percent the year. Against the , the dollar was 0.4 percent lower.
Meanwhile, sterling was shaky after Bank of England Governor Mark Carney said there was an "uncomfortably high" risk of Britain leaving the European Union without a deal.
