Investing.com - The dollar tumbled over 1% against the other major currencies on Monday, to hit an eight-month low amid a broad based selloff in global equity and commodity markets as mounting fears over a slowdown in China fuelled widespread risk aversion.
EUR/USD rallied 1.73% to an eight-month high of1.1710.
Wall Street opened sharply lower on Monday, after Chinese shares tumbled more than 8% overnight. The decline came as Beijing held back from implementing fresh measures to support Chinese equities after markets fell 11% last week.
Financial markets have been roiled since China devalued the yuan on August 11,exacerbating fears over a China-led slowdown in the global economy.
The dollar has come under pressure as mounting uncertainty over the global growth outlook and the subdued U.S. inflation outlook has prompted investors to scale back expectations for an initial rate hike by the Federal Reserve.
The dollar also extended losses against the safe haven yen, with USD/JPY down 2.72% to a three-month low of 118.75.
Elsewhere, the dollar was lower against the pound and the Swiss franc, with GBP/USD gaining 0.41% to 1.5758 and with USD/CHF tumbling 1.32% to 0.9341.
The Australian and New Zealand dollars were weaker, with AUD/USD losing 1.35% at six-year lows of 0.7212 and with NZD/USD plummeting 2.59% to 0.6510.
The antipodean currencies are sensitive to news out of China, a top export market for Australia and New Zealand.
Meanwhile, the greenback was steady against the Canadian dollar, with USD/CAD at 1.3185, off 11-year highs of 1.3289 hit earlier in the session.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 1.43% at 93.47, the lowest level since January.