The dollar index against a basket of six major currencies was changed as little as 96.126 after losing 0.55% on Friday.

Escalating trade tensions between the US and its trade partners, along with a major decline in the Turkish lira, has taken a heavy toll on emerging market currencies.

These strains pushed the dollar index to 96.984 last Wednesday– its highest since June 2017.

However, the dollar’s advance halted right ahead of lower-level trade talks between Chinese and Uso fficial in Washington, which were scheduled for Tuesday and Wednesday. Receding worries over the Turkish lira’s late plunge on Friday reduced the risk aversion in the broader markets –which lifted the euro.

Yukio Ishizuki, senior currency strategist at Daiwa Securities, stated:  “The U.S.-China negotiations…will not be between high level officials and are therefore unlikely to produce immediate results. However, the markets will be hoping that the talks pave the way for negotiations at a higher level,”

“As for the lira, the currency could cause less of a buzz as Turkey is headed for a long holiday, and with credit downgrades done swiftly and now out of the way.” He added.

The Turkish financial markets will be closed for national holidays during August 21-24.

Standard & Poor’s cut Turkey’s sovereign credit rating by one notch to B+ from BB- on Friday, sending it deeper into “junk” territory, citing the extreme volatility of the lira, and forecasting an upcoming recession next year.

The Turkish lira had snapped a three-day rebound On Friday, sliding more than 5 % against the dollar on fears the US would impose further economic sanctions– unless Turkey handed over detained American pastor Andrew Brunson.

The euro managed to bounc back on Friday, after sliding to a 13-month low early last week amid concerns that the Turkish crisis could hurt European banks.

The single currency rose 0.55 % on Friday and last stood little changed at $1.1436.

The offshore Chinese yuan was effectively flat at 6.838 per dollar after gaining about 0.4 % on Friday, when it pulled further away from a 19-month low of 6.9585 brushed on Wednesday.

The dollar remained unchanged at 110.51 yen after shedding 0.35 % on Friday.