The U.S. dollar stabilized in early European hours Monday after suffering its worst weekly drop this year, while weak Chinese growth data pressured the yuan.

At 03:05 ET (07:05 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded marginally lower at 99.597, after dropping 2.2% last week, its sharpest one-week fall since November.

The dollar index last week fell below the 100 level for the first time since April 2022 after softer-than-expected inflation data-consumer prices on Wednesday and producer prices on Thursday-supported the view that the Federal Reserve will end its interest rate-hiking cycle after a final increase next week.

USD/CNY rose 0.5% to 7.1744 after data released earlier Monday showed China's second-quarter gross domestic product grew 0.8% from the prior quarter, a substantial slowing from the 2.2% seen in the prior quarter.

EUR/USD rose 0.1% to 1.1238, with the euro continuing to find favor after jumping 2.4% last week to a 16-month high.

Elsewhere, GBP/USD edged lower to 1.3081, trading just below last week's 15-month peak, while USD/JPY fell 0.2% to 138.47, with the yen boosted by falling U.S. bond yields, ahead of the Bank of Japan's policy meeting next week.

AUD/USD fell 0.4% to 0.6809, with the Australian dollar suffering alongside the yuan given the historic trade links between the two countries.

Source : Investing.com