China was again the epicenter of unease as the People's Bank confounded analysts by guiding the yuan sharply stronger, a move that might calm concerns about a competitive devaluation but only added to market confusion as to Beijing's ultimate intent.
MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.6 percent, led by a 1.7 percent dive in Australian stocks. E-mini futures for the S&P 500 were down 0.8 percent in a sizable move for Asian hours.
Gold gained in Asia on Monday on continued economic turmoil expected in China and a backdrop of tense Middle Eastern disputes between Iran and Saudi Arabia. Gold for February delivery on the Comex division of the New York Mercantile Exchange rose 0.80% to $1,106.70 a troy ounce. Also on the Comex, silver futures for March delivery gained 0.55% to $14.005 a troy ounce. Elsewhere in metals trading, copper for March delivery fell 0.21% to $2.010 a pound.
Crude slumped further in early Asia on Monday with markets in Japan shut for a holiday and little on the regional data calendar on the day, but key trade data expected from China later this week. On the New York Mercantile Exchange, crude oil for delivery in February dropped 2.11% to $32.46 a barrel. Global crude production is outpacing demand following a boom in U.S. shale oil and after a decision by the Organization of the Petroleum Exporting Countries last year not to cut production in order to defend market share. Dollar-priced commodities become more expensive to investors holding other currencies when the greenback gains.
The dollar surged as much as 10.3 percent at one stage to 17.9950 rand, before tracking back to 16.8550. That was still up sharply from 16.3150 late in New York on Friday. The euro was well supported at $1.0937, while the Dollar Index dipped 0.26 percent to 98.279. In currency markets, the main beneficiary was the yen which is often favored in times of stress as Japan remains the world's largest creditor nation. The dollar fell half a yen to a near five-month low of 116.70 yen in early trade, before steadying around 117.03.