Dol­lar dumped on China econ­omy jit­ters


Cur­rency traders dumped the dol­lar Mon­day on the back of a global eq­ui­ties rout, as fears about China and the global econ­omy ham­mered sen­ti­ment and sent in­vestors flee­ing into safer in­vest­ments.

The green­back dropped to 121.19 yen from 122.06 in New York on Fri­day and sharply down from above 124 yen on Thurs­day in Asia. The euro rose to $1.1451 from $1.1386, while it weak­ened to 138.77 yen from 138.97 yen in US trade. Jit­ters over China and the global econ­omy saw traders move into the yen - - a safe haven in times of tur­moil and un­cer­tainty -- as stocks mar­kets around the world plunge.

On Mon­day, Shang­hai shares tum­bled more than eight per­cent in the morn­ing, while Tokyo s bench­mark stock in­dex dropped 3.21 per­cent by the break. In­vestor fears have spiked on con­cerns the world s sec­ond-big­gest econ­omy is slow­ing more than pre­vi­ously thought af­ter China s cen­tral bank de­val­ued the yuan in a shock move seen as a bid to boost sag­ging ex­ports. On Fri­day, China re­ported weak man­u­fac­tur­ing data, fuelling con­cerns among in­vestors over the cloud­ing out­look for the world econ­omy.

"China fixes, Shang­hai and US stock mar­ket per­for­mances and the ac­tions -- or lack thereof -- of Chi­nese pol­i­cy­mak­ers, prom­ise to keep mar­kets rapt," Na­tional Aus­tralia Bank in a com­men­tary. The dol- lar was also hit as hopes dive for an im­mi­nent US in­ter­est rate hike. "The yen and euro are ben­e­fit­ing from both emerg­ing­mar­ket risk aver­sion caused by China s sur­prise move this month on the yuan and from fall­ing ex­pec­ta­tions that the Fed will hike in­ter­est rates," Man­soor Mohi-ud­din, se­nior mar­kets strate­gist in Asia at Royal Bank of Scot­land, told Bloomberg News.

Min­utes from the Fed­eral Re­serve s July meet­ing last week re­vealed pol­i­cy­mak­ers want to see fur­ther im­prove­ment in the labour mar­ket and in­fla­tion be­fore rais­ing in­ter­est rates for the first time in nearly nine years. In­vestors eye re­vised US eco­nomic growth data which will be re­leased this week as a fresh sign for the tim­ing for an in­ter­est rate hike.

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