The dollar dipped against the safe-haven yen on Thursday amid a spike in risk aversion, as equities continued their retreat on concerns about growth in the world's largest economy.
The spread between the two-year and five-year Treasury yields inverted this week and the two-year/10-year spread was at its flattest in more than a decade amid a sharp fall in long-term rates. A flatter curve is seen as an indicator of a slowing economy, with lower longer-dated yields suggesting that the markets see economic weakness ahead.
The euro was little changed at $1.1346 after retreating from this week's high of $1.1419 scaled on Tuesday.
The Australian dollar was down 0.66% at $0.7222. The Aussie was on a shaky footing after shedding nearly 1 percent the previous day on weaker-than-expected third quarter Australian gross domestic product data.
The pound was a shade lower at $1.2723. Sterling had sunk to a 17-month low of $1.2659 on Tuesday after parliamentary setbacks for Prime Minister Theresa May but clawed back some of those losses on a more positive outlook for Brexit.
The People's Bank of China (PBOC) set the yuan reference rate at 6.8599 vs the previous day's fix of 6.8476.
Oil prices fell along with weak stock markets on Thursday, but trading was tepid ahead of a meeting by producer group OPEC that is expected to result in a supply cut aimed at draining a glut that has pulled down crude prices by 30 percent since October.
U.S. stock futures and Asian shares tumbled on Thursday after Canadian authorities arrested a top executive of Chinese tech giant Huawei for extradition to the United States, fanning fears of a fresh flareup in tensions between the two superpowers.
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