The U.S. dollar stepped back from a one-month high tested overnight as equity market futures moved higher on Tuesday, while investors, bracing for a potential default by property developer China Evergrande, sought safety in the yen.

Default fears continued to stalk China Evergrande Group despite efforts by its chairman to lift confidence in the embattled property company. Financial markets looked for possible intervention by Beijing to stem any domino effects across the global economy.
“With no signs of a possible solution on the horizon, we see the case for the default risks to continue growing and keep adding pressure to the broader risk appetite,” said Charalambos Pissouros, head of research at JFD Group.

Against a basket of its rivals, the dollar steadied at 93.190 after reaching its highest since Aug. 23 at 93.45 in the previous session. U.S. equity futures were up 1%.

As markets stabilized after Monday’s selloff, investors remained broadly cautious. A currency market volatility gauge (.DBCVIX) climbed to its highest levels since end-July.

Before Evergrande’s debt crisis unnerved markets, the dollar has been supported ahead of a Federal Reserve meeting this week, where economists in a Reuters poll expect policymakers to signal expectations of a tapering plan to be pushed back to November.
The Swiss franc edged higher to 1.0869 per euro, but was still near Monday’s peak of 1.08750.

Defying the risk-averse mood, the Australian dollar rallied 0.4% to $0.7278, rebounding with oil prices after dipping to $0.72205 in the previous session for the first time since Aug. 24.

Cryptocurrencies continued to struggle amid the souring in risk sentiment, with bitcoin broadly steady around $43,000 on Tuesday after earlier touching $40,192.90 for the first time since Aug. 6.

Smaller rival ether rebounded 2.8% to $3,060, after dipping to $2,803.20, also a first since Aug. 6.