The euro hovered near one-year lows against the dollar and the Swiss franc on Tuesday as the Turkish lira wobbled, on worries economic troubles in Turkey could hit European banks and spread to other emerging economies.

Investors are nervous the plunge in the lira could prompt capital outflows from other emerging economies that run a hefty current account deficit and rely on foreign capital. As of 0010 GMT, the euro traded at $1.1405, having fallen to a 13-month low of $1.1365 on Monday. So far this month it has lost 2.4 per cent.

Investors have rushed to the safe haven Swiss franc, which hit a one-year high of 1.1288 franc per euro on Monday and last stood at 1.1324. The Turkish lira slipped 0.6 per cent in early Asian trade on Tuesday to 6.955 per dollar, though it hovered above a record low of 7.24 hit on Monday after the central bank pledged to provide liquidity.

The lira has fallen almost 30 per cent so far this month on concerns about President Tayyip Erdogan's reluctance to raise interest rates despite rising inflation and a deepening diplomatic rift with the United States. “The Turkish lira remains volatile and it is too early to say the lira has settled down. For now, currencies will be driven by the Turkish lira,” said Yukio Ishizuki, senior strategist at Daiwa Securities. “But the euro's fall on worries about European banks' exposure to Turkey seems a bit over done, considering that their scale is not that huge,” he added.

The yen, often perceived to be a safe haven because of Japan's net creditor status, changed hands at 110.74 per dollar , off a 1 1/2-month high of 110.10 touched on Monday. The yen slipped from highs as the dollar was helped by rises in US bond yields. The 10-year US Treasuries yield bounced back to 2.877 per cent from a three-week low of 2.848 per cent.

“The initial reaction emerging economies usually take in a currency crisis is to dip into their foreign reserves. That means they sell US Treasuries, boosting their yields, which helps to lift the dollar against the yen,” said Makoto Noji, chief currency strategist at SMBC Nikko Securities.

Already on Monday, Indonesia's central bank intervened to defend the rupiah while India's central bank was seen intervening after the rupee hit a record low. The South African rand also fell more than 10 per cent at one point on Monday to hit a two-year low of 15.70 to the dollar, although it later pared much of losses. It last stood at 14.41.

Argentina's currency fell 2.4 per cent to close at a record low 29.97 per dollar on Monday, as a local corruption scandal added to its woes, prompting the country's central bank to hike interest rates by 5 percentage points to 45 per cent.

In Asia, investor focus is mainly on a series of Chinese data releases for July, due later in the day, which could give an early glimpse into the economic impact of the tariffs the United States and China imposed on each other on July 6.

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