The euro tumbled to a six-week low against the dollar on Monday, as investors grew increasingly nervous about Italy's election results.

Investors instead turned the safe haven qualities of the dollar and yen as early exit polls indicated a win by the centre-left coalition.

However with no party or coalition able to form a majority in the upper house or Senate there is growing concern that Italy will face political deadlock, which could threaten the nation's economic reforms and weigh on the Eurozone debt crisis.

The euro skidded to a low of $1.3047 before later trading at around $1.3075 as risk appetite faded.

Against the yen, the single currency fell to a low of ¥118.77 and later traded at ¥120.03.

The dollar index, which measures the US unit against six other major currencies, climbed to 81.766 from 81.454 on Friday as investors turned cautious on Monday.

Against the yen, the dollar traded at ¥91.84 compared to ¥93.43 on Friday after reports that head of Asian Development Bank Haruhiko Kuroda could be the new head of the Bank of Japan. Kuroda is widely viewed as a supporter of Prime Minister Shinzo Abe's more aggressive monetary easing measures.

Sterling continued to fall on Monday following Moody's downgrade on Friday. The pound changed hands at $1.5160 from $1.5245 on Friday.



CJ

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