The euro slipped to a fresh one-year low of $1.3115. The common currency was expected to remain under pressure ahead of Thursday's European Central Bank policy meeting. While many market participants do not expect the ECB to take major easing steps this week, a few are seen braced for new policy measures. Further central bank easing is considered a matter of when and not if in the face of risks to euro zone growth posed by the Ukraine conflict and stubbornly low inflation.
"This week may start to mark the biggest shift in global monetary policy since 'Abenomics' went into full steam on the appointment of Haruhiko Kuroda to head up the BOJ," equity strategists at Jefferies wrote in a note to clients.
The decline in European headline inflation rates, collapse in German bund yields, and the call by the president of the ECB for 'growth friendly' fiscal policy suggests that Europe is finally moving towards quantitative easing, they said.
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