The euro today plunged to 16-month lows against the US dollar and sterling as worries about the euro zone debt crisis continued.
Better economic news from the US and UK also lifted the two countries' currencies.
This evening, the euro was trading at $1.2788, its lowest level since September 2010, while the euro fell to 82.5p against sterling at one point.
The euro also dived against the Japanese currency to strike 98.48 yen - a level last seen in December 2000.
Analysts said that the pressure on the euro is unrelenting, following today's better than expected US jobs news. The dollar was boosted by the news that new claims for US unemployment benefits fell last week, resuming a downward trend that pointed to growing strength in the jobs market.
Financial markets were also underwhelmed by the outcome of a French bond auction.
The euro has renewed its slide against the dollar on heightened concerns that the euro zone debt crisis - which has already resulted in bailouts for Greece, Ireland and Portugal - could also strike the far-larger economies of Italy and Spain.
In recent weeks it has also plunged to a series of 10-year lows against the safe-haven yen as investors reacted to mounting economic uncertainty in Europe.
Sentiment was hammered this week after banks' deposits with the European Central Bank hit a new record high, suggesting that lenders remain reluctant to lend to each other amid ongoing market tension. Banks put €453.18 billion on deposit at the ECB for 24 hours on Tuesday, breaking a previous record set last week, it said.
In another gloomy development, Prime Minister Lucas Papademos said yesterday that Greece faced an "uncontrolled default" in March - unless trade unions and employers can quickly agree on labour cost cuts to boost competitiveness.
EFSF raises €3 billion in bonds for Ireland, Portugal
The European Financial Stability Facility, the euro zone bail-out fund, today raised €3 billion in three-year bonds to help financially struggling Ireland and Portugal.
"This first three-year bond placed by the EFSF was met with strong demand, with orders received close to €4.5 billion from investors around the world," it said.
The issue "shows that EFSF has established itself as a quality supranational issue," the fund's deputy CEO, Christophe Frankel said.
The €440 billion EFSF was created in May 2010 to protect vulnerable euro zone nations after Greece was bailed out by the European Union and the International Monetary Fund.
The temporary fund is to be replaced this year by the European Stability Mechanism (ESM).
Spain sees big bill for bank bad loans
Spain's new economy minister said today that banks may face up to €50 billion in bad loan provisions and he vowed to crack down on regional deficits in a new austerity drive.
Economy Minister Luis de Guindos' estimate of the banks' bad loans, provided in an interview with the Financial Times, was higher than many private forecasts.
De Guindos' comments revealed the scale of the challenges confronting the new right-leaning government: a troubled financial sector, bulging public deficit, and feeble economy with high joblessness.
"If you take international valuations as in the case of Ireland, at the most you are talking about the need for €50 billion of extra provisions for Spanish banks," De Guindos said. "In the great majority of cases, they can provide it themselves from their profits, and it could be done not in one year but over several years," he added.
The banks loaned huge amounts of money during the property bubble, which imploded in 2008 leaving them holding piles of doubtful loans and devalued real estate assets.
The property crash also destroyed millions of jobs, leaving Spain with an unemployment rate of 21.5%, and sent the economy into a slump from which it has yet to recover.
Banks are now being pressed by new rules forcing them to boost levels of rock-solid core capital, and by the weak economy, which makes it tougher to turn a profit.
The European Banking Authority said in December that Spain's five biggest banks required an extra €26 billion in capitalisation. De Guindos' warning came as Prime Minister Mariano Rajoy's cabinet met to decide on austerity measures to help meet a target of slashing the deficit to 4.4% of gross domestic product in 2012.
Spain is set to miss its target of reducing the public deficit from 9.3% of GDP in 2011 to 6% in 2012, with a final figure possibly topping 8%, the government says. That overshoot could add another €20 billion to the required austerity measures, now estimated at €16.5 billion, according to the Popular Party government, which won power in November 20 elections.
Last week, the government announced budget amounting to €8.9 billion, and tax increases, including on salaries and on capital income, to bring in another €6.275 billion.
Spain's 17 autonomous regions, which are responsible for health and education services, were hard hit by the housing market crash and are a growing source of concern for economists and policy-makers. De Guindos vowed to crack down on their spending.
The economy minister also said Spain's austerity programme will target the powerful regions, with a new law in March introducing strict control over their budgets.
Spain seeks to recoup €8.17 billion in tax fraud plan
Spain aims to recoup €8.17 billion in 2012 by fighting tax fraud, the new government said today.
The government is drawing up an anti tax fraud scheme to include boosting the number of inspectors and limiting the size of cash payments, Deputy Prime Minister Soraya Saenz de Santamaria said after a cabinet meeting.
The government will "limit the practice of paying in cash in certain transactions to fight the underground economy," she told a news conference.
Last week the government announced a hiring freeze on civil servants but excluded tax inspectors and emergency services workers from the measure.
