Euro, yen surge as risk aversion intensifies; dollar takes a hit

London

THE euro hit a 61/2-month high and the yen reached a three-month peak against the dollar on Monday as investors dumped riskier assets and flocked to currencies seen as safe havens on fears about a slowdown in the Chinese and global economies.

The dollar index, which measures the greenback's performance against a basket of six major currencies, fell 0.9 per cent to its lowest in two months as investors pushed back expectations of a rate hike by the Federal Reserve in September. The 10-year US Treasury yield fell to 2 per cent, diminishing the dollar's allure.