London

AN already weak US dollar dropped to 16-month lows against a basket of major currencies on Monday, as flooding caused by Hurricane Harvey paralysed the United States' fourth-biggest city of Houston, Texas, and drove worries about a hit to the economy.

The greenback had already fallen sharply on Friday, after US Federal Reserve Janet Yellen failed to mention monetary policy at the closely watched Jackson Hole meeting in Wyoming. Investors saw this as evidence that Ms Yellen was comfortable with their rate hike expectations - currently only one is priced in by the end of next year.