NEW YORK: The euro stabilized Monday after hitting a three-month low as investors digested political upheavals in weekend elections in France and Greece that cast doubt on eurozone austerity measures.
The euro was at $1.3052 around 2100 GMT, down from $1.3082 at the same time Friday.
Before the New York markets opened, the single currency shared by the 17 nations in the eurozone had slumped to $1.2954, its lowest level since January 25.
Kathy Lien at GFT noted the euro's recovery "suggests that investors hope that Europe's political uncertainties will be resolved quickly."
Against the Japanese currency, the euro came off its lows but remained lower, at 104.28 yen, compared with 104.46 yen late Friday. The dollar inched higher to 79.88 yen from 79.85 yen.
Investors appeared cautious in view of the political developments in Europe over the weekend.
In France, Socialist Party candidate Francois Hollande ousted President Nicolas Sarkozy on Sunday, becoming the first socialist in 17 years elected to lead the eurozone's second-largest economy.
In Greece, mainstream parties that supported an EU-IMF bailout of the country lost control of parliament.
"The market has walked back from the edge of the abyss a little bit in the wake of the election result" in Greece, said David Gilmore at Foreign Exchange Analytics.
"It's still euro-negative but this is not immediately the end of the eurozone and the departure of Greece," he said.
Tommy Molloy, chief dealer on the trading floor at FX Solutions, noted that trade was "very thin" given that markets were closed in Britain for a bank holiday.
"Right now the biggest question the market has is what kind of relationship France will have with Germany with (President Nicolas) Sarkozy gone. The ball is in Hollande's court as to what kind of a relationship we are going to see going forward," Molloy said.
BNY Mellon's Michael Woolfolk echoed that uncertainty.
"French support for the German approach to dealing with Europe's debt crisis will decline, but it is too soon to tell whether this will prompt a change," Woolfolk said.
"Certainly the probability of Greece leaving the eurozone has increased, though probably not yet a 50 percent likelihood."
The dollar firmed to 0.9200 Swiss frances from 0.9180 francs late Friday. But it weakened against the British pound, which fetched $1.6189 compared with $1.6156.
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