The euro slid to two-week lows versus the dollar this morning after selling off sharply the previous day.
The euro fell as low as $1.4589, before recovering a little to $1.4606 earlier this morning, still down a third of a per cent on the day.
The fall came after ECB governing council member Yves Mersch said he did not rule out a downward revision of euro zone growth forecasts for 2008, and that the central bank should remain flexible with regard to fighting inflation.
The euro fell more than 1 per cent yesterday - its worst daily performance in a month.
But analysts said the dollar would probably struggle to progress much further due to expectations for at least a half point interest rate cut by the Federal Reserve this month to stimulate the sagging economy.
The dollar hit a one-week high of 1.1087, bouncing up from yesterday's record low of 1.0836. It also recovered from this week's two-and-a-half-year troughs versus the yen, edging up 0.1 per cent on the day to 107.62 yen.