The dollar fell almost one per cent this morning to its lowest level in over a month against the euro.
The fall comes amid renewed concern of a global equities rout after Tokyo stocks plunged to 18-year lows. The dollar was also at two-week lows versus the yen.
US stock futures were pointing to heavy losses at the Wall Street opening after Tokyo's benchmark Nikkei average tumbled more than 3 per cent to its lowest since November 1983. Dealers were also cautious of holding dollars ahead of key US manufacturing data later in the day.
At 11 a.m (Irish time), the dollar was down three-quarters of a per cent at $0.9915 per euro after hitting a low of $0.9938, its lowest level since late July. It was down just over three-quarters of a per cent at 117.18 yen.
The dollar has closely tracked the performance of global equity markets in recent months as investor risk aversion has raised doubts over the United States's ability to attract sufficent capital inflows from overseas to fund its huge trade deficit.
The drop in Tokyo stocks led to dollar sales by traders worried about a possible spill-over effect on European and US equity markets and prompted concerns it would lead Japanese investors to start sending money home.