In London deals, the European single currency fell to US$1.4474 from US$1.4539 late in New York on Monday. Against the yen, the U.S. dollar gained to 81.11 yen from 80.80 yen.

“After yesterday’s quiet trading session caused by the United States’ July 4th holiday, investors have come back in today and decided to keep away from risky assets,” said Kathleen Brooks, research director at trading group Forex.com.

In London on Tuesday, the euro changed hands at US$1.4474 against US$1.4539 on Monday, at 117.41 yen , 0.9008 pounds and 1.2222 Swiss francs .

The U.S. dollar stood at 81.11 yen and 0.8444 Swiss francs .

The pound was at US$1.6068 .

On the London Bullion Market, gold prices climbed to US$1,496.95 an ounce from US$1,495 on Monday.

In Asia Tuesday, the dollar rose against the euro and yen on safe haven demand as concerns over a possible Chinese rate hike sapped risk appetite, dealers said.

The greenback was also buoyed by speculation of increased fund inflows back to the United States, dealers said, following a report about a corporate tax holiday on the foreign profits of U.S. firms.

The euro sagged to US$1.4461 in Tokyo trade from US$1.4524 in London late Monday. The European single currency was almost flat at 117.32 yen against 117.30 yen.

The dollar gained to 81.06 yen from 80.77 yen.

The dollar has been supported against the yen by positive sentiment on the back of recent gains in U.S. Treasury yields and a rally in the stock market, a trust bank trader told Dow Jones Newswires.

The dollar gained against other Asian currencies, to S$1.2271 from S$1.2254 on Monday, to 1,066.15 South Korean won from 1,063.78 and to NT$28.78 from NT$28.67. It also gained to 8,536.75 Indonesian rupiah from 8,521.50, to 43.09 Philippine pesos from 43.06 and to 30.49 Thai baht from 30.47.

S&P said on Monday that recent proposals for a new Greek bailout, under which private sector banks would rollover their exposure, would be tantamount to a partial debt default, the very outcome officials are trying to avoid.

There is concern that a default could spread domino effects across the eurozone and the global financial system.

The market was meanwhile digesting comments made on Monday by The People’s Bank of China, which said that inflationary pressures “are still high” while the economy continues to grow at a steady and relatively fast pace.

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