The euro was on track for its worst week versus the dollar in two years today, hurt by tempered expectations of euro zone rate hikes and political jitters surrounding Ireland's referendum on EU reforms.
The euro was down 0.8 per cent today at $1.5430, on track for its biggest weekly loss in percentage terms since early June 2006.
European Central Bank President Jean-Claude Trichet last week opened the door to a July rate hike, but policymakers since then have reiterated his message that this would not be the start of a big monetary tightening campaign.
French economy minister Christine Lagarde today went one step further, saying that the ECB may even reconsider the July move after this weekend's G8 meeting.
Adding pressure on the euro was news of a potential $46.3 billion outflow from euros to dollars as Belgium's InBev - the world's largest beer producer by volume - launched a bid for Anheuser-Busch, the US maker of Budweiser and Michelob.
Political jitters also weighed as Ireland went to the polls on a close-run referendum on European Union reform, flashing up memories of a euro sell-off in 2005 after the French and the Dutch voted "no" on the EU constitution.
The dollar hit a one-month high versus a basket of six major currencies at 73.888. It added 0.7 per cent to 107.63 yen, nearing a four-month peak of 107.75 struck yesterday.