* Aussie dollar hits new 2-1/2-year low in early trade
* Emerging market currency index slips
* Swedish crown little changed vs euro after Sunday’s election
* Graphic: World FX rates in 2018 tmsnrt.rs/2egbfVh
By Daniel Leussink
TOKYO, Sept 10 (Reuters) - The dollar edged higher against a basket of currencies on Monday thanks to strong U.S. August jobs data and amid fears of a potentially major escalation in the China-U.S. trade conflict.
U.S. President Donald Trump warned on Friday that he was ready to slap tariffs on virtually all Chinese imports into the United States, threatening duties on another $267 billion of goods in addition to the $200 billion already facing the risk of duties.
“If there are any signs that the U.S. economy is finally hit by its own protectionist moves, then I think that’s the start of full-blown risk aversion,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.
“This will at least lead to the weakness of the dollar against the yen,” Yamamoto said. He warned markets didn’t yet fully price in the impact of U.S. tariffs on virtually all imports from China.
The dollar index, which measures the greenback against a basket of six currencies, traded about 0.1 percent higher at 95.425 as of 0310 GMT, moving toward a three-week high of 95.737 hit on Tuesday last week.
The index advanced more than 0.3 percent on Friday after data showed U.S. job growth picked up in August and wages recorded their largest annual gain in more than nine years.
The strong data further supported the prospect of faster rate rises by the Federal Reserve, boosting demand for the dollar.
The Fed is all but certain to raise rates a third time this year in late September.
Still, markets remained on edge about a possible new round of U.S. tariffs on imports from China.
Investors have been waiting for a fresh salvo to be fired in the Sino-U.S. trade war after a public comment period for proposed U.S. tariffs on a list of $200 billion worth of Chinese imports, which includes some consumer products, ended late last week.
An emerging market currency index slipped on Monday after booking its biggest weekly loss in three weeks last week.
“Further tariffs are likely to lead to a weaker Chinese yuan and stronger dollar, and I think emerging market currencies will fall in response,” said Minori Uchida, chief currency strategist at MUFG Bank.
“If emerging market currencies in Asia decline, other emerging units are likely to fall as well. When the atmosphere becomes risk off, the yen is likely to strengthen,” he said.
China’s offshore yuan was nearly flat at 6.8701 yuan per dollar in mid-morning trade. It had weakened more than 0.3 percent during the previous trading session.
The Australian dollar was barely changed at $0.7107, pinned near a 2-1/2-year low of $0.7097 touched earlier in the day.
The dollar was nearly unchanged against the yen at 110.98 yen per dollar.
The euro was a tad lower at $1.1550 after falling more than half a percent during the previous session in the wake of the U.S. job data.
The Swedish crown was little changed against the euro as Sweden headed for a hung parliament after an election on Sunday that saw support for the nationalist Sweden Democrats surge. (Editing by Shri Navaratnam)