Economic, credit worries rattle investors

The dollar hit a record low against the euro on Monday before recovering as traders seized on the G7's apparent indifference toward dollar weakness as a cue to sell.

G7 officials made no explicit reference to the U.S. currency's weakness.

"There were some fears that somehow the G7 was going to mention dollar weakness but this was not the case and this gave the green light for dollar selling," said Chris Turner, head of FX strategy at ING.

The euro was flat at $1.4311 but had earlier hit $1.4348, its highest since the single European currency was launched in 1999.

Euro zone government bond prices rose.

"It's all about stocks, credit scares are back," said one trader.

Two-year bond yields were 2.3 basis points lower at 3.984 percent, while 10-year yields were at 4.201 percent.