The euro extended losses against the US dollar today after ECB President Jean-Claude Trichet said inflation risks in the euro zone have diminished.
Mr Trichet was speaking after the European Central Bank held its benchmark rate steady at 4.25 per cent.
"I think it's a bit of a lose-lose for the euro going into Trichet's speech," said Vassili Serebriakov, senior currency strategist at Wells Fargo in New York.
"His remarks were quite dovish and it's a negative for the currency. The market's reaction is fairly straightforward and the euro is reacting on weak fundamentals."
The euro slipped against the dollar to $1.3807 from where it traded at $1.3880 before Mr Trichet began speaking. The euro is now down 1.5 per cent on the day.
Reuters