The euro was under some pressure Monday following news that talks to form a new government in Germany had collapsed.
Market players, however, were somewhat relaxed over the ongoing political instability in Berlin, despite this being the first time since World War II that a general election had not led to a new government.
Kit Juckes, global head of FX strategy at Societe Generale, described the pressure on the euro as "not a dramatic reaction."
In fact, the currency began retracting some of the earlier losses in mid-morning trade in Europe and the German stock exchange was modestly lower, down by 0.2 percent.
"Germany's strong and improving fundamentals provide some important insulation from political concerns. In other words, the ship can effectively sail itself," Rabobank said in a note Monday.
Data released last week showed the German economy beating analysts' forecasts with a 0.8 percent growth in the third quarter of the year. At the same time, confidence levels among German businesses hit an all-time high in October and the unemployment rate remained at an historic low, Deutsche Welle reported.