The euro fell to a one-week low against the dollar on Monday on concerns over French politics
ahead of the presidential vote in April as well as other impending elections in Europe in a year of political uncertainty.
"Political risk is serving to dampen the euro after last week's stumble from the $1.08 area," said Shaun Osborne, chief FX strategist, at Scotiabank in Toronto.
German factory orders rose 5.2 percent in December, the biggest monthly increase in 2 1/2 years, but the data had little market impact.
Investors were largely focused on French politics, as far-right National Front leader Marine Le Pen launched her presidential bid, vowing to fight globalization and take France out of the euro zone.
In Italy, another presidential election looms even as former Italian prime minister Matteo Renzi said he was willing to shelve his push for early voting.
In afternoon trading, the euro fell 0.26 percent against the dollar to $1.0751. Earlier, it dropped to $1.0705, its weakest level since Jan. 31.
The dollar, however, slid to its lowest in more than two months against the yen, pressured by a drop in U.S. Treasury yields, analysts said. The spread between U.S. two-year and Japanese two-year debt yields contracted to around 139 basis points on Monday, the narrowest in about two weeks, a positive for the yen.