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* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
By Saikat Chatterjee
LONDON, Sept 7 (Reuters) - The dollar rose for a second consecutive day on Tuesday, moving away from a near-one month low hit last week, as firming U.S. Treasury yields prompted investors to cut short dollar positions against the euro before a central bank meeting this week.
The greenback plunged to its lowest levels since early August on Friday after a surprisingly soft U.S. payrolls report on Friday prompted analysts to raise bets the Federal Reserve will not unwind its stimulus plans in the coming months.
But the dollar scored some cautious gains against rivals in the past two sessions as rising U.S. yields undercut bearish sentiment. Against a basket of its rivals the greenback rose 0.1% to 92.25. On Friday, it hit its lowest since Aug. 4.
"The 10-year yield is trading near 1.36% and is on the way towards testing the July 14 high near 1.42% and this has helped the dollar index to recoup its post-NFP (non-farm payrolls) losses and then some," Brown Brothers Harriman strategists said in a daily note.
U.S. 10-year yields which were around 1.299% before Friday's data release, stand now at 1.365%, four basis higher on the day and the highest since Aug. 26.
While trading ranges were narrow because of Monday's U.S. holiday, broader sentiment was more upbeat as Chinese economic data boosted sentiment, with the euro and the Canadian dollar retracing most of their losses versus the U.S. currency.
The euro changed hands at $1.1884, slightly below Friday's one-month peak of $1.1909 but still well-supported ahead of the European Central Bank's policy meeting on Thursday.
The ECB is seen debating a cut in stimulus with analysts expecting purchases under the ECB's Pandemic Emergency Purchase Programme (PEPP) falling possibly as low as 60 billion euros a month from the current 80 billion.
The Australian dollar was the only currency that was relatively volatile in Asian trading after the central bank stuck with plans to taper its bond buying but said it would extend the timeline as the economy struggles with coronavirus lockdowns.
Broader currency market swings were subdued with a gauge measuring market volatility holding near its lowest levels this year at 5.7%.
Crytocurrencies provided some spark in the London session with bitcoin and ether weakening 4% and 6% respectively.
(Reporting by Saikat Chatterjee; Additional reporting by Hideyuki Sano in TOKYO; Editing by Raissa Kasolowsky)