A rise in political uncertainty in Spain, where the prime minister is facing calls to resign, and in Italy, which holds a general election later this month, provoked a big sell off on Monday, ending a solid new year rally.
The euro, which has taken the brunt of the selling, had risen 2.3 percent against the U.S. dollar this year to a high of just over $1.37 on Friday, before the selloff began and was down 0.4 percent at $1.3460 in early European trade.
