The dollar pared gains as U.S. stock markets erased advances after China cut interest rates following Monday’s $2.7 trillion global equity wipeout.

The dollar trimmed earlier gains, rising 0.5 percent to 118.98 yen as of 4:09 p.m. in New York, after slumping to 116.18 on Monday, the weakest since Jan. 16.

The greenback rose 1.1 percent to $1.1488 per euro, bouncing back after Europe’s single currency gained 5.4 percent in the previous four days, the most since March 2009. The Bloomberg Dollar Spot Index rose 0.6 percent to 1,195.07, the biggest gain in seven weeks.

Traders have increased the probability of the Fed raising rates at its September meeting to 28 percent, rebounding from as low as 20 percent Monday. The calculation is based on the assumption that the effective fed funds rate will average 0.375 percent after the first increase.

Source: Bloomberg