The dollar tanked the most in seven years against major currencies as data indicating a slowdown in service industry growth fueled concern over the strength of the U.S. economy. American stocks staged an afternoon rally, erasing earlier losses as crude oil rebounded.

The dollar index slid as much as 1.9 percent to an over seven-week low, making commodities priced in the greenback cheaper for holders of other currencies, amid growing skepticism that the Federal Reserve would be able to hike U.S. interest rates again this year and after data showed the U.S. services industry had slackened to the weakest pace in nearly two years.

The Dow Jones Industrial Average soared more than 180 points, recouping some of Tuesday’s slump as Exxon Mobil Corp. led a rally among energy producers.

Oil Up

Oil prices jumped 8 percent higher on Wednesday to over $31 a barrel in New York, snapping a two-day rout and rebounding from its biggest two-day plunge in seven years as investors took advantage of a weaker U.S. dollar and shrugged off data showing a surprisingly large surge in U.S. crude inventories.

Currency traders are catching up to the bond market, where 10-year yields sank to the lowest in a year Wednesday as futures are sending the strongest signal yet that traders expect the Fed to stand pat this year.

Concern about a global demand slump and policy makers’ response to a slowing growth worldwide has shaken the $5.3-trillion-a-day currency market. The dollar’s pullback this week has reversed all the yen’s decline against the greenback on Friday when the Bank of Japan introduced negative interest rates to revive inflation, which is stuck near zero.