Investing.com - The euro fell on Monday while the U.S. dollar was higher as political uncertainty in Italy continues and former IMF Director Carlo Cottarelli was named stopgap Prime Minister of Italy.
EUR/USD fell to a six-month low of 1.1619 by 10:59 AM ET (14:59 AM GMT), the weakest level since November 8.
The single currency came under renewed selling pressure as investors digested the prospect of fresh elections in Italy.
The euro had risen earlier in the day to 1.1733 after Italy’s populist parties abandoned their bid to form a coalition government after the country’s President Sergio Mattarella blocked the nomination of a eurosceptic finance minister.
Investors had feared that the coalition could endanger Italy’s membership in the euro zone.
Former IMF Director Carlo Cottarelli was asked to form a government by Mattarella on Monday after the president rejected the finance minister but new elections are expected to be held early next year.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was last at 94.38, the strongest level since mid-November on the back of the weaker euro.
Trade volumes looked likely to remain light on Monday, with markets in the U.S. and the UK closed for holidays.
The dollar was lower against the yen, with USD/JPY down 0.03% to 109.34 after edging up to an overnight high of 109.84.
The pound was up but fell from its earlier high, with GBP/USD rising 0.03% to 1.3299.
Elsewhere, the Australian dollar was flat, with AUD/USD at 0.7547, while NZD/USD jumped 0.38% to 0.6939.