By Peter Nurse

Investing.com – The dollar pushed higher in early European trade Monday, rallying to a  month-high on the back of safety flows given concerns about the health of Chinese property giant Evergrande and ahead of this week’s crucial Federal Reserve meeting.

At 2:35 AM ET (0735 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.2% higher at 93.328, having earlier climbed to 93.356, its highest since Aug. 23.

fell 0.1% to 109.83, dropped 0.1% to 1.1715, falling to its lowest since late August, fell 0.3% 1.3706. The risk sensitive fell 0.4% to 0.7237, a three-week low, hit by the slump in iron ore prices, one of Australia’s key exports.

Worries about the financial health of have hit equities, prompting risk-off sentiment within the foreign exchange market, to the benefit of the safe-haven dollar.

Evergrande, China’s 2nd-largest property developer in terms of sales, has amassed debts totalling $300 billion. There are increasing doubts about Evergrande’s ability to pay $83.5 million in bond interest payments due Thursday. In a fragile time for China’s economy, a messy default could have more serious consequences.

But the primary focus is still on the U.S. central banks, who will hold a two day policy meeting next week. It ends on Wednesday.

It is expected that the Fed will continue to support broad plans for tapering in this year’s economy, but it won’t give details nor a timetable at its meeting. 

That said, Friday’s U.S. consumer sentiment release showed improving confidence, while were surprisingly strong in August, implying an improving economy.

“The August job report pulled the rug from under most analysts/market participants betting on a firm September taper announcement,” said analysts at Nordea, in a note. “We are not certain that the Fed will dare to present a firm tapering plan on Wednesday, but we remain firm that they will have to take further steps toward becoming concrete on how and when [this week].”

The Fed isn’t the only central bank meeting this week, with the likes of the , the and the also scheduled to get together. The main news will likely come from Scandinavia with Norges Bank, Norway’s central bank, expected to be the first to raise rates in Western Europe.

Elsewhere, rose 0.3% to 1.2810, with the oil-sensitive Canadian dollar hit by Monday’s fall in oil prices as well as political uncertainty ahead of an election where polling suggests incumbent Prime Minister Justin Trudeau will remain leader of a minority government.