Dollar Gains Versus All Major Peers as Stocks Drop; Euro Slides

The dollar rose versus all of its 16 most-traded peers as deepening concern that Europe’s sovereign-debt crisis will worsen sent stocks tumbling and Wall Street’s so-called fear gauge to the highest level in two months.

The euro tumbled to a record low against the Swiss franc and dropped to the weakest level in two months versus the greenback as Italy faced a possible credit-rating cut and Spain’s ruling party was routed in local voting. Australia’s currency was among the worst performers versus the U.S. dollar after a Chinese manufacturing gauge fell to a 10-month low.