The euro slipped below $1.18 for the first time in over a month today after its worst day so far this year yesterday.

The fall came as investors worried that months of coalition talks in Germany could hit the economy and make closer euro zone integration difficult. 

Shortly after 6.15pm Irish time the single currency was worth $1.1793 and £0.8773.

German Chancellor Angela Merkel won a fourth term in elections on Sunday but now faces a tough juggling act to form a government with other parties.

Yesterday she struck a note of caution with respect to French calls for fiscal union. 

French President Emmanuel Macron, who wants a fundamental overhaul of the European Union's single currency zone and whose ideas include creating a euro zone budget and a euro zone finance minister, will lay out his plans in a speech in Paris today. 

But the results of Germany's election have forced Merkel to consider a new coalition including the liberal Free Democrats (FDP), a party critical of Macron's ideas on Europe.

Investors are therefore worried the reforms that they would welcome will not end up going through. 

The euro slipped 0.5% to as low as $1.1786, its weakest since August 25, after falling around 0.9% yesterday - its heaviest one-day loss since December.

Analysts said that hopes for greater euro zone integration had been the main cause of a more than 10% appreciation by the euro against the dollar since the first round of France's presidential election. 

The euro faced additional pressure yesterday when European Central Bank President Mario Draghi singled out currency volatility as a source of uncertainty that required monitoring and argued that "ample" ECB accommodation was still needed. 

Meanwhile, the dollar was flat at 111.80 yen, having earlier dipped against the Japanese currency as worries over North Korea flared up again amid an escalating war of words between it and the US. 

The yen made sharp gains versus the dollar yesterday after the North Korean foreign minister said President Donald Trump had declared war on the country and that Pyongyang reserved the right to take countermeasures, including shooting down US bombers even if not in its air space.