The US dollar moved higher in the European session as markets turned to safe-haven trading amid uncertainty over China's economy.
China continued to be in the spotlight on Tuesday, with the country's real estate giant Country Garden on the verge of default due to its debt crisis.
The property developer faces a deadline to make interest payments on two US dollar bonds today that could push it into default if it fails.
However, the company eventually managed to pay the interest on the two bonds totaling $22.5 million before the last minute.
Even so, the market remains worried about the possibility of the next crisis that could lead to the downfall of the country's entire real estate industry.
Meanwhile, data from China's Caixin survey service published in the Asian session showed that the sector grew more slowly than expected in August.
This has prompted a sharp fall in commodity-related currencies, particularly the Aussie, New Zealand and Canadian dollars.
The Aussie dollar plunged to a three-week low after also being pressured by the Reserve Bank of Australia's (RBA) decision to keep its interest rate unchanged at 4.10%.
The US dollar rose to a new high since May 31, seeing the dollar index strengthen at 104.56 against most major currencies.
Meanwhile, the euro and the pound also experienced a fall with each falling to a 3-month low as they were affected by the higher surge in the US dollar.
On the other hand, the yen also recorded a decline against the US dollar but increased against most major currencies, which indicates that it also gained support as a safe-haven.
