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 percent 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 percent 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 U.S. bond yields. The 10-year U.S. Treasuries yield bounced back to 2.877 percent from a three-week low of 2.848 percent.
"The initial reaction emerging economies usually take in a currency crisis is to dip into their foreign reserves. That means they sell U.S. 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 percent 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 percent 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 percent.
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.
(Editing by Sam Holmes)
© Reuters News 2018