The euro was pummelled by investors as political chaos loomed in Germany after the weekend election failed to provide a clear winner. See more on German election

The euro sank to a low of $1.2101, a decline of about 1.6 per cent from Friday’s intra-day high, before staging a modest rally to trade at $1.2155. Traders said at first that previous support levels about $1.2040 could come under attack and if breached would leave the way clear for the sellers to aim for the July low of $1.1870.