The dollar eased against the safe-haven yen and the low-yielding euro on Monday as investors around the world knocked down equities and trimmed bets against currencies popularly used to fund risky carry trades.
Under carry trades, investors sell a low-yielding currency to buy riskier, higher-yielding ones for better returns. When volatility rises in global financial markets and stocks fall, they tend to take these positions off the table.
The pan-European FTSEurofirst 300 shares index posted its worst monthly performance since August 2011 with a 9 percent loss, in part because U.S. policymakers appear to be nearing interest rate hikes.
Stock markets in China and Japan also fell, with Wall Street indexes down about 0.80 percent in late New York trading and en route to the biggest monthly decline in more than three years.