European index futures tumbled this morning, following a slide in Asian equities overnight.
Meanwhile the euro dropped to its lowest level since 2001 against the yen and oil declined for a third day in New York, the longest losing streak in a month, amid growing concern that European officials are struggling to stabilise the euro zone debt crisis.
The Dollar Index, which tracks the greenback against six US trading partners, climbed for a third day to its strongest level in more than six months as investors bought the safest assets. The yen advanced versus all of its 16 major peers.
The Australian and New Zealand dollars weakened as Asian stocks extended a global slump amid reports France's three largest banks may have their credit ratings lowered.
The 17-nation euro dropped 1.5 per cent to 104.37 yen overnight in Tokyo from 105.99 yen on Friday and earlier slid to 104.27, the lowest since June 2001.
The Standard and Poor's 500 index slumped 2.7 per cent on Friday, while the Stoxx Europe 600 Index lost 2.6 per cent after top German European Central Bank board member Jürgen Stark resigned, casting doubt on the region's ability to tackle its worsening sovereign debt crisis.
Angela Merkel is due to hold talks on the debt crisis with European Commission President Jose Manuel Barroso today.
Officials in Merkel's government are debating how to shore up German banks in the event that Greece fails to meet the budget-cutting terms of its aid package and is unable to get a bailout-loan payment, three coalition officials said on Friday.
