ROME, May 31 (Xinhua) -- The protracted political crisis in Italy is taking its toll on the embattled euro, amid fears over the possible policies from a populist government and nervousness that Italy could rethink its membership in the 19-nation currency zone.

The euro has lost about 1-percent of value against the dollar every week since reaching its highest point of just under 1.26 U.S. dollars per euro in mid-February. On Wednesday, it briefly dipped below 1.15 U.S. dollars per euro for the first time since July 2017, before rebounding slightly on the final day of the month.

According to Giuseppe De Arcangelis, an international economics professor at Rome's La Sapienza University, non-Italian factors have also been weighing on the euro-dollar exchange rate.

"The dollar has been under-valued against the euro for some time, and economic growth, especially in southern Europe, has been modest," De Arcangelis said in an interview.

But jitters over developments in Italy -- the country is still without a government more than 12 weeks after the March 4 general election -- are the biggest factors pushing the euro lower.

The central fears come from the prospect that a populist government in Italy might ignore European Union rules limiting budget deficits and total debt, and that it might eventually look to completely withdraw from the euro currency zone.

One of the obstacles that has so far prevented Italy from forming a government has been the insistence to include 81-year-old economist Paolo Savona in a ministerial post by the anti-establishment Five-Star Movement and the nationalist League. Savona is a euro-skeptic who believes Italy should abandon the euro.

The Five-Star Movement campaigned in part on a promise to hold a referendum on the future of the euro. It has since backed away from that idea, though pollsters say it remains popular among backers of the party.

"If Italy were going to leave the euro it would not be through a referendum," Lorenzo Codogno, founder and chief economist of LC Macro Advisors and a visiting professor at the London School of Economics, told Xinhua. "It would happen the way Savona has said it: they would announce it on a Saturday, the banks would be closed on Monday, and Tuesday there would be a new currency."

But Codogno stressed he did not believe Italy was headed in that direction.

"Italy is bound to the euro by treaties and it is in Italy's interests to remain in the euro-zone," Codogno said.

"If the country were to move in that direction I think we would first see Italy losing market assets and so much turmoil that the government could just say 'We were forced to take this step'. But we care very far from that point right now."

De Arcangelis said that fears that Italy might become unpredictable under a potential populist government are spooking markets more than prospects the country might ditch the euro.

"Markets want predictability and Italy has not be very predictable lately," De Arcangelis said.