Australian shares closed at a three-month low on Monday, with miners and energy companies bearing the brunt of a broad market sell-off as the safe-haven US dollar’s surge to a two-decade peak hit commodity prices.

The S&P/ASX 200 index ended 1.6% lower at the close of trade, falling for the third straight day.

The benchmark fell 1.9% on Friday.

The dollar index climbed above 114.50 for the first time since 2002, supported by rising Treasury yields, the pound’s decline to a record low and overall risk aversion.

“The big story remains the US dollar and the huge effect its surge is having,” said Henry Jennings, a senior market analyst from Marcustoday Financial Newsletter.

Additionally, Kunal Sawhney, chief executive officer at Kalkine Group, said the whole week could reflect the sour sentiment, with the benchmark likely to exhibit volatility, but with a chance of little upside.

Investors are already fearful about a recession given that major central banks around the world have been raising interest rates in a bid to tame price pressures.

Back in Australia, the resources sectors led the rout with miners dropping the most about 5.9%.

Australia shares hit over two-month low on Fed’s stance; banks, tech stocks weigh

Rio Tinto, BHP Group and Fortescue Metals falling between 4.2% and 5.4%.

Oil and gold prices were under pressure due to the surging greenback.

The gold index slumped 6.5% to a four-year low, with Newcrest Mining falling 5.3%.

Energy stocks lost nearly 6.3%, marking their biggest intraday percent drop since March 23, 2020. On the positive side, healthcare stocks gained nearly 2% in their best day since mid-May, on the back of a stronger greenback, with index major CSL Ltd rising 2.9%.

However, Ramsay Health Care skidded around 2.4%, after a KKR & Co led consortium withdrew its A$20 billion ($13.01 billion) to buy the hospital operator.

The New Zealand market was closed due to a public holiday.