The euro sank to a seven-week low today as German voters failed to pick a clear election winner and left Europe's largest economy facing potential political gridlock.
The currency fell to $1.2109, its lowest since July 29th and off late Friday levels near $1.2232, before recovering to about $1.2117. The dollar was slightly higher against the yen at 111.62 from 111.34 on Friday.
Oil prices climbed more than 1 per cent as a storm headed for the US, another factor for Opec oil ministers to consider while they meet in Vienna to decide on output levels.
European markets were gearing up for a split at the start, with spread betters in London calling the FTSE 100 up between 1 and 2 points, while the CAC 40 and DAX indexes were tipped between 26 and 33 points lower.
Nymex crude for October delivery added 71 cents, or more than 1 per cent, to $63.71 a barrel in Asia trade as a new storm approached the United States.
Tropical Storm Rita strengthened in the southeastern Bahamas and could become a category one hurricane - the weakest classification on the five-step scale -- by the end of the day, according to the US National Hurricane Center.
Hurricane Katrina was classed category four when it hit the coast. "It's still a ways off but some models have it going right into the Gulf," said John Brady of ABN AMRO in New York.
Crude has fallen from a record $70.85 a barrel in the three weeks since Katrina tore into US Gulf refineries. Opec ministers sought to reassure traders that markets would receive sufficient supplies, but others said the focus should be on oil products.