A gauge of the dollar strength gained as signs that China may be relaxing its grip on the yuan spurred risk aversion.  

The Bloomberg Dollar Spot Index rose 0.3%, with the world's reserve currency advancing against all of its of Group-of-10 peers

The People's Bank of China set Tuesday's yuan reference rate at 7.1565 per dollar, correcting an earlier fixing in the morning when it had indicated a stronger fixing of 7.1365. The Chinese central bank has been supporting the currency, which helps anchor other foreign exchange rates in Asia.

Broad-based dollar purchases were seen, particularly against the Aussie and kiwi, after the PBOC set the yuan fixing above 7.15, according to Asia-based FX traders.

AUD/USD drops 0.4% to 0.6550; NZD/USD down 0.4% to 0.6083.

Expectations for July economic data are already quite low and as such, the balance of risks for the yuan may be asymmetric, she added.

China said July exports in dollar terms fell 14.5% on year, worse than the 13.2% estimate.

The China Foreign Exchange Trade System published a revised fixing minutes after the original release. When contacted, it said there's no any extra comment aside from what was released on the website.

USD/JPY rose 0.6% to 143.31 after data showed Japan's nominal cash earnings rising 2.3% in June from the prior year, decelerating from a revised 2.9% pace in the previous month.

Source: Bloomberg