The euro fell to its lowest level in 11 months against the dollar on Tuesday after sources said Germany's Angela Merkel has rejected any suggestion of raising the funding limit of Europe's future bailout fund, the European Stability Mechanism (ESM)..

The euro fell as low as $1.3111 on Reuters data, the weakest since mid-January. It was last at $1.3116, down 0.5 percent.

The euro also hit a new two-month low against the yen at 102.03 on Reuters data, down 0.7 percent on the day.