The dollar fell to new lows on Friday on rumours that China might shift some of its currency reserves away from the greenback, highlighting the dollar-related jitters in financial markets.

The fragility in currency and bond markets has centred on fears that Asian central banks might dump US assets to avoid large losses as the dollar's value falls. The markets' nerves were highlighted by Friday’s investor reaction to a report, later retracted, that China's central bank was offloading US Treasury bonds.