By Gina Lee

Investing.com – The dollar was down on Monday morning in Asia, while the yen, a fellow safe-haven asset, sank to its lowest level in nearly three months.

Riskier assets, such as the Australian dollar, continued to recover from an almost one-month low as fears of the economic contagion from China Evergrande Group’s (HK:) receded slightly.

The that tracks the greenback against a basket of other currencies edged down 0.12% to 93.222 by 12:11 AM ET (4:11 AM GMT).

The pair edged down 0.14% to 110.56.

The pair was up 0.32% to 0.7281 and the pair edged up 0.12% to 0.7020.

The pair edged down 0.12% to 6.4585 and the pair inched down 0.04% to 0.3677.

The benchmark climbed to 1.466% for a second day on Monday, its highest level since Jul. 2, 2021.

The correlation between USD-JPY and U.S. bond yields has increased. USD-JPY looks a little stretched, so I’d be wary to chase here, but I would be looking for a re-test of 110.50 as a potential support zone within what is a progressively bullish trend,” Pepperstone head of research Chris Weston said in a note.

The higher U.S. yields also attracted Japanese investor money, also contributing to the yen’s fall.

In a client note, Commonwealth Bank of Australia analysts stated that the U.S. Dollar will likely remain trapped in the cross-currents of an increasingly hawkish Fed as well as fading worries about a possible Evergrande default.

Although some fears that China Evergrande might default on $305 billion worth of debt remain, they are slowly receding. On Monday, the People’s Bank of China infused a net CNY100billion ($15.46billion) into the financial sector. This is on top of last week’s net CNY320billion.

Investors continue to be cautious about the current situation.

CBA notes that the “risks are skewed towards a firmer Dollar” with renewed Evergrande fears unlikely to spark the market volatility seen the previous week.

In Europe, the euro was little changed at $1.1724 even as Germany’s Social Democrats narrowly won over incumbent Chancellor Angela Merkel’s Christian Democratic Union of Germany party in Sunday’s election.