NEW YORK: The dollar dipped on Monday as its three-month rally took a breather on nervousness over Beijing's response to democracy protests in Hong Kong over weekend and whether they might hurt its economy and status as a global financial hub.
The dollar's rally on expectations the Federal Reserve would raise interest rates in the mid-2015 was seen as overdone and the currency was headed for a pullback, analysts said. "The situation in Hong Kong is starting to weigh on people.
The dollar just has had this massive rally. You are beginning to see some profit-taking," said Boris Schlossberg, managing director of FX strategy at BK Asset Management in New York.
The greenback reached six-year highs against the yen in Asian trading, while the dollar index hit a four-year peak before falling on worries about Hong Kong and a sell-off on Wall Street.
The dollar was up 0.1 percent at 109.40 yen, down from an earlier peak of 109.74 yen, according to Reuters data.
The dollar index slipped 0.02 percent at 85.622 after rising to 85.798 earlier.
The euro steadied against the greenback at $1.2696, up 0.09 percent from late Friday. The single currency hit a two-year low against the dollar earlier Monday at $1.2665.
The biggest mover among developed-world currencies was the New Zealand dollar.
Figures showed the country's central bank intervened heavily against its currency in August in a bid to help its exporters. The kiwi was down 1.4 percent to its lowest against the dollar since August 2013, last traded at $0.7765.
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