The dollar weakened against the Yen on Monday and also retreated slightly against both the Euro and the pound sterling. The unexpected announcement from China that it had lowered its forecast for economic growth for the current year had an impact on investors' willingness to take on more risk. Premier Wen Jiabao announced Monday, at the annual meeting of the National People's Congress in Beijing, that the country now expects full year growth to be 7.5 percent. China has maintained a growth target of 8 percent for the past eight years.
The slowdown was attributed to a decline in export growth, due to weaker demand from the U.S and the European countries, as well as China's own tight monetary policy.
China has pledged to maintain a "prudent" monetary policy. The People's Bank of China decided to cut the banks' reserve requirement rate by 50 basis points last month, for the second time in three months. The move was intended to boost lending amid sluggish economic growth.