The euro surged to a six-month high yesterday after Angela Merkel said it was “too weak” for Germany, though rumblings in Spain, Britain and Brussels reminded investors that Europe still has plenty of uncertainties to deal with.

A one-month high for oil on hopes of Opec output curbs had helped give Asian shares their best session in weeks but Europe had struggled to maintain the momentum.

Investors continue to focus on the problems that have engulfed President Donald Trump’s United States administration over the last week but there were other familiar and not so familiar issues to deal with too.

Currency markets flipped 180 degrees as Ms Merkel, during a trip to a Berlin school, made a surprise reference to the euro being “too weak” due to the European Central Bank’s ultra-low interest rates and money printing programme.

Up until that point the single currency had been in the red but the comments saw it swiftly climb to a six-month high $1.1250 and bring the rebound in the dollar to an abrupt halt.

Stocks and European bonds remained soft, however, as one of the most outspoken critics of Mariano Rajoy’s ruling party and Spain’s austerity policies has returned to front the opposition Socialist party.

Britain’s pound was also in the firing line, back to $1.30, as polls showed the country’s election race tightening and its chief Brexit negotiator again threatened to walk away from European Union exit talks unless the bloc eased its demands.

The euro’s rally meant the dollar was pulled back to the six-month low it hit last week after concerns about Mr Trump’s firing of a former FBI head and his administration’s links to Russia had given the greenback a drubbing.

The dollar index, which tracks the United States currency against a basket of six major rivals, dropped from 0.2 per cent higher to 0.2 per cent lower to add to a fall of around six per cent since the start of the year.

Oil also rose yesterday, bolstered by confidence that top exporters will at least agree to extend supply curbs at an Opec meeting this week, with suggestions that the cuts could even be deepened.

Brent crude was up 40 cents at $54.00 a barrel, with US light crude 38 cents at $50.71. Both benchmarks have climbed more than 10 per cent from lows hit earlier this month.

“The decision (to extend cuts) seems to be almost a done deal,” said Bjarne Schieldrop, chief commodities analyst at SEB Markets.

“There seems to be a very high harmony in the group.”