The arrest of IMF chief Dominique Strauss-Kahn on charges of attempted rape added to the existing uncertainty about the eurozone debt crisis on Monday, helping keep the euro near seven-week lows and knocking European stocks.
The euro fell as far as $1.4, its lowest since March 30, having dropped 6% from a 17-month peak of $1.5 hit less than two weeks ago. It later recovered to stand flat at $1.4.
While there was little sign that the International Monetary Fund's (IMF) overall activities would be curtailed by its managing director's arrest, it comes almost on the eve of a series of new talks on how to handle the euro zone crisis.
Meanwhile, The IMF, which said Strauss-Kahn had been in New York on private business, moved to fill a leadership vacuum by naming number two official, John Lipsky, as acting managing director.