FXstreet.com (Barcelona) - Overnight, the US dollar weakened against most major currencies, as the Reserve Bank of Australia decided to keep rates on hold, pushing the Aussie and a basket of currencies higher.

However, the dollar erased some losses against the euro and sterling as European stock markets hit record lows, driving nervy investors back into the 'safe haven' dollar, said Union Bank of California Team.

As investors trade on fear over the global economy, there has been an inverse correlation between the dollar and the stock markets. The fear and flight of nervy investors helps the dollar rally.