Euro hits four-month low on heightened Greek fears

The euro has hit a fresh four-month low against the dollar as political uncertainty in Greece fuels speculation the country could be forced to leave the single currency.

The euro fell more than a half a cent to $1.27. Against the pound, the euro slipped slightly to 79.6 pence.

The eurozone crisis also pushed Asian stocks lower and knocked oil prices.

On Tuesday, Greek politicians failed to form a coalition, meaning the country will go the polls again next month.

In elections earlier this month, the majority of Greeks voted against those parties backing drastic austerity measures agreed with the EU.

Analysts and some politicians are now openly discussing the possibility of Greece leaving the euro.

Uncertainty about the future of the euro has hit world stock markets this week, and Asian shares fell further on Wednesday. Tokyo's Nikkei index dropped 1%, while Hong Kong's Hang Seng and South Korea's Kospi lost about 3%.

The oil price also fell. London Brent fell by $1.25 a barrel to $111, while US light crude fell $1.60 to $92.38.