The dollar held largely steady against a basket of major currencies on Monday thanks to strong US August jobs data and amid fears of a possible escalation in the China-US trade conflict.

US President Donald Trump warned on Friday that he was ready to slap tariffs on virtually all Chinese imports into the United States, threatening duties on another $267 billion of goods in addition to the $200 billion already facing the risk of duties.

“If there are any signs that the US economy is finally hit by its own protectionist moves, then I think that's the start of full-blown risk aversion,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities. “This will at least lead to the weakness of the dollar against the yen,” Yamamoto said. He warned markets didn't yet fully price in the impact of US tariffs on virtually all imports from China.

Investors have been waiting for a fresh salvo to be fired in the Sino-US trade war after a public comment period for proposed US tariffs on a list of $200 billion worth of Chinese imports, which includes some consumer products, ended late last week.

The dollar on Monday edged lower against the safe-haven Japanese yen and the Swiss franc, trading at 110.94 yen and $0.9693, respectively. The yen strengthened as revised gross domestic product for April-June showed Japan clocked an annualised growth rate of 3.0 per cent, much faster than a preliminary estimate of 1.9 per cent growth last month.

The dollar index, which measures the greenback against a basket of six currencies, was basically flat at 95.381, not far off a three-week high of 95.737 hit on Tuesday last week. The index advanced more than 0.3 per cent on Friday after data showed US job growth picked up in August and wages recorded their largest annual gain in more than nine years.

The strong data further supported the prospect of faster rate rises by the Federal Reserve, boosting demand for the dollar. The Fed is all but certain to raise rates a third time this year in late September.

The euro was 0.07 per cent higher at $1.1557, paring some losses after falling more than a percent during the previous session in the wake of the US job data. The Swedish crown was about 0.1 per cent weaker against the euro and dollar as Sweden headed for a hung parliament following Sunday's elections.

The Australian dollar was 0.06 per cent higher at $0.7110, coming off a more than 2-1/2-year low of $0.7097 touched in early trade as trade-related tensions continued to weigh on commodity-linked currencies. China's offshore yuan strengthened 0.1 per cent to 6.867 per dollar. It weakened more than 0.3 per cent during the previous trading session on fears of a possible escalation in the China-US trade conflict.

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