The euro has fallen under $1.15 for the first time in over eleven years as traders reacted to increasing signs that the European Central Bank will launch a bond buying programme.
The currency had earlier regained more than 3% of its losses against the Swiss franc as investors took the Swiss move to scrap its currency cap as a sign the ECB would begin quantitative easing.
The euro suffered the biggest one-day fall against the Swiss franc in its history yesterday.
It dropped over 18% after the Swiss National Bank stunned markets by scrapping its three-year-old pledge to limit the value of the franc to 1.20 per euro.
Dealers speculated the Swiss had moved because they knew the European Central Bank would take the plunge into full-scale quantitative easing - effectively the printing of hundreds of billions of euros - at its policy meeting on January 22.
After falling as much as 30% in a matter of minutes yesterday in wake of the SNB's shock move, to a record low of 0.8500 Swiss francs, the euro was last trading at 0.98 francs.
That was down on the day and considerably below where it was before the SNB decision.
The loss of Swiss support for the euro - one of the few supports it had left - caused the euro to fall under $1.15 for the first time in over 11 years.
Analysts said that while the euro may have suffered deep losses, it will still come across selling pressure of a different kind if the ECB does decide to adopt quantitative easing next week.
The common currency is also gearing up for another trial as the foreign exchange markets await the closely-watched ECB policy meeting on January 22 and a snap election in Greece three days later.
Financial markets are keeping a nervous watch on the January 25 Greek vote, as a win by the leftist Syriza party could trigger a standoff with the EU/IMF lenders and drive Greece from the euro zone.
Traders said the ECB bond-buying programme would inject fresh euros into the market, some of which would ultimately flow into the safe-haven Swiss franc.
That would render the task of maintaining the 1.20 per euro cap all the more difficult and expensive for the SNB, hence its decision to abandon the pledge.
Meanwhile, European shares fell today, led by a fresh slide in Swiss stocks, as investors digested the impact of a leap in the franc after the shock lifting of a central-bank currency cap on the previous day.
Watch maker Swatch and private bank Julius Baer led a 3.5% slide in Zurich's SMI index as analysts and traders warned of a hit to Swiss exporters' and investors' returns after the franc's rally against the euro and the dollar yesterday.
