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

NEW YORK – 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)