Euro erases gains versus U.S. dollar on Italy fears

The euro surrendered all of its gains to trade negative versus the dollar in early afternoon trade Tuesday as investors feared Italy may be the next country to need a bailout.

The euro fell as low as $1.3766, down 0.1 percent on the day, according to Reuters data .

Traders cited strong support in the $1.37-$1.3750 area. A fall beneath that level could cause the euro to slide toward $1.34.

Italian bond yields hit a 14-year high and the country's embattled leader, Silvio Berlusconi, lost his parliamentary majority and faced the possibility of being forced to resign. (Reporting by Wanfeng Zhou; Editing by Dan Grebler)