The euro fell to its lowest level since November against the dollar on Tuesday as political turmoil in Italy and Spain weighed, while the safe haven yen posted broad gains amid widespread risk aversion.
EUR/USDÂ was down 0.29% to 1.1591 by 03:33 AM ET (07:33 AM GMT), the weakest level since November 11.
The euro initially spiked on Monday after Italy’s President Sergio Mattarella blocked the nomination of a euro sceptic finance minister. But the move prompted Italy’s populist parties to abandon their bid to form a coalition government and the country is now expected to go to the polls again later this year.
Investors fear that fresh elections could be seen as a quasi-referendum on Italy’s role in the European Union and may end up bolstering anti euro parties even more.
