US dollar plummets as rate-hike expectation dims

NEW YORK - The US dollar dropped against most major currencies on Monday as investors lowered their expectation for an interest-rate hike this year following a rout in global equity markets.

US stocks slumped after opening on Monday, with the Dow Jones Industrial Average sliding below 16,000 for the first time since February 2014.

Meanwhile, the Chinese stock markets had their worst day in eight years with the benchmark Shanghai Composite Index tumbling 8.49 percent to close at 3,209.91 points.

European equities also dived on Monday following the steep decline in the previous session, as the Stoxx Europe 600 was down over 6 percent and Germany's DAX dropped 4 percent.

Analysts said the weak economic data from China had fueled worries that a drop-off in Chinese growth could cause a global slowdown, thus casting uncertainties on the timing of the Federal Reserve raising interest rates.

They noted that higher rates would increase borrowing costs for companies and consumers, causing possible damage to the world economy.

The dollar index, which measures the greenback against six major peers, was down 1.71 percent at 93.386 in late trading.

In late New York trading, the euro rose to 1.1591 dollars from 1.1359 dollars in the previous session, and the British pound climbed to 1.5773 dollars from 1.5703 US dollars in the previous session. The Australian dollar inched down to 0.7184 dollar from 0.7329 dollar.

The US dollar bought 118.62 Japanese yen, lower than 122.06 yen of the previous session. The greenback dived to 0.9336 Swiss franc from 0.9486 Swiss franc, and surged to 1.3241 Canadian dollars from 1.3170 Canadian dollars.