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The euro crawled back from a fresh 16-month low to the dollar on Monday as traders trimmed short positions, but further declines were anticipated as worries over sovereign funding kept investors bearish on the currency. Markets were awaiting a meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy where they will discuss ways to boost growth and final details of a deal to increase fiscal coordination in the euro zone.[+]

"The euro is not in crisis, the currency has solidly maintained its exchange rate with the dollar," Monti said on RAI 3 public television, adding that Italy's "banking system is not under threat". "The problem we are facing is that some EU countries have a public debt crisis," he said. "Our crisis is a systemic crisis." Monti, a former European commissioner who took office as Italy's prime minister and finance minister in November, said Italian commercial banks "are not under threat".[+]

The euro hit 16-month lows against the dollar and sterling on Friday and hovered near an 11-year low versus the yen, with further declines seen in store for the embattled single currency. Market players said little relief was in sight for the euro, with next week's Italian and Spanish government bond sales likely to keep the market on edge and the euro under pressure.[+]

Gold rallied more than 1 percent and silver jumped over 2 percent on Tuesday as investors returned in the new year with a renewed appetite for riskier assets such as commodities, although global economic worries still weighed on sentiment. Better-than-expected manufacturing data from China fuelled interest among investors who had moved to the sidelines because of year-end credit tightness. A weaker dollar also helped fuel gains in commodities.[+]

As the troubled euro marked its 10th anniversary this weekend, the Centre for Economics and Business Research (CEBR) said there was a 99pc chance that the currency would not survive the next 10 years. "It now looks as though 2012 will be the year when the euro starts to break up," the CEBR said. The think tank added that Britain could well be in recession already, with growth likely to contract in the final quarter of 2011 and the first quarter of 2012.[+]

The euro fell to a decade low versus the Japanese yen on Monday as concerns about the financing needs of indebted euro zone countries continued to weigh on the shared currency, though moves were exacerbated in holiday-thinned trade. The euro fell as low as 98.71 yen on EBS trading platform, its lowest since late 2000, extending falls seen on Friday when it broke below 100 yen to finish the year down around 8 percent.[+]