The single currency gained 0.3 per cent in early trading in Europe to $1.0489. The currency briefly hit a high for the year during morning trading in Asia, rising as much as 0.7 per cent to $1.0528. “Obviously some relief is showing through in the euro now,” said Tony Sycamore, a market analyst at IG Australia.

An election win for Germany's conservatives eased concerns of political gridlock on Monday, but failed to lift uncertainty around whether a new government can deliver the fiscal reforms markets see as vital to boosting an ailing economy.

German stocks rose modestly after a solid election victory for the conservative Friedrich Merz left him with a clear path to form a governing coalition. The DAX index recently stood a