The euro fell for the second straight day as investors grappled with growing disenchantment over closer European unity.

Voters in France resoundingly rejected the proposed constitution on Sunday. The Netherlands votes today and is widely expected to reject it, too. Other nations are now unsure whether to put the constitution to voters.

The euro, a symbol of European unity, has suffered since the French vote. The euro fell yesterday to $1.2306 as of 4 p.m. That is down from $1.2574 late Friday in New York and nearly 10 percent off its high, reached at the end of last year.

The dollar's strength has come in part from concerns about the European constitution. But the dollar has also benefited from improved growth in the United States while European economies have stumbled. Moreover, short-term interest rates, an important consideration for currency investors, have risen in the United States to 3 percent while the European Central Bank has kept rates steady at 2 percent. That means holders of short-term debt are paid slightly more to hold dollars than euros.

The euro's ups and downs have been hard to predict in its short life, sinking like a stone for its first two years before stabilizing and eventually soaring.

While some analysts expect the euro's slide since the start of the year to be short-lived, others think that Europe's political problems will reignite investors' interest in the dollar. The dollar fell out of favor with large U.S. trade and budget deficits and concerns about corporate malfeasance. Few of those concerns have lessened, but the rejection of the European constitution demonstrates the many challenges facing the euro and euro zone economies.

Sunday's "no" vote by 55 percent of French voters is a reminder of how disparate the European Union is politically despite its common currency, and of the risk taken by those investing in what has become the world's second-most-widely held currency since its birth more than six years ago.

Investors are busy reassessing whether Europe can manage a single currency for 12 countries without a single government to back it up.

"I'm absolutely sure the euro zone will overcome its present difficulties, as it has in the past," Jean-Claude Trichet, president of the European Central Bank, said in Frankfurt yesterday.

Currency traders aren't so certain. They worry that the French and Dutch votes will slow economic reform in the euro area, says Brown Brothers Harriman & Co. currency strategist Meg Browne. That would make Europe a less attractive place to invest, reducing the demand for euros.

"The euro's weakness reflects a growing perception that the E.U. regime of economic governance is plunged into uncertainty, with the credibility of central institutions undermined," said Julian Callow, chief European economist at Barclays Capital in London.