The euro touched the lowest in more than a decade versus the yen after European governments signaled bondholders may have to take bigger losses on Greek debt, deepening concern the debt crisis will damp recovery prospects.

The 17-nation currency reached an eight-month low versus the dollar as global stocks slumped. Russia's ruble fell for a fifth day versus the dollar on concern the euro-area debt crisis will hurt oil demand. The Australian dollar declined to the least in more than a year versus the greenback after the Reserve Bank of Australia held its key rate at 4.75 percent.

"Central banks are now rebalancing their reserves and whereas earlier in the year that meant buying euros and non- dollar currencies, we're now in the reverse situation," said Ray Attrill, a senior currency strategist at BNP Paribas SA in New York. "That's probably amplifying the pressures that are coming from safe-haven flows, which tend to support the dollar."