The euro dived Monday to a new 11.5-year low against the dollar as the European Central Bank kicked off its radical 1.1-trillion-euro ($1.2-trillion) bond-buying programme, known as quantitative easing.
Sentiment was also weighed down by concerns over Greece, with Athens due to present its reform plans to Brussels in order to secure a financial lifeline.
In Asian trading hours, the shared eurozone unit sank to $1.0823, last seen in September 2003, having hit a similar low on Friday as upbeat US payrolls data boosted expectations for a Federal Reserve rate hike.
"Strong US nonfarm payroll numbers punished the euro on Friday, but this morning’s roll-out of the eurozone’s QE programme saw the single currency drop even further," said ETX Capital analyst Daniel Sugarman.
In later morning London deals, the euro recovered slightly to stand at $1.0876, up from $1.0842 late in New York on Friday.
The Frankfurt-based ECB announced Monday that it and the national central banks of the euro area have started buying bonds as part of the long-awaited purchase programme to combat the deflation threat.
Further details about the purchases -- the amounts or whether they were public or private-sector bonds -- were not immediately available.
However, Europe's main stock markets sank as investors took profits from last week's ECB-inspired gains.
In late morning deals on Monday, London's benchmark FTSE 100 index of leading companies fell 0.62 percent to 6,869.10 points.
Frankfurt's DAX 30 shed 0.24 percent to 11,523 points and the CAC 40 index in Paris lost 0.49 percent to 4,939.90 points compared with Friday's close.
- Euro/dollar parity? -
Some analysts predict the eurozone unit could reach parity against the dollar, amid a growing policy divergence between the ECB and the Fed.
The US Federal Reserve had ended its own QE program in October.
"The euro looks likely to remain weak over the coming weeks given that the ECB and Federal Reserve appear on diverging tracks in terms of monetary policy," CMC Markets analyst Michael Hewson told AFP.
"With 10 yield spreads between US treasuries and German bunds wider than they have ever been, the prospect of further euro losses towards parity remains a distinct possibility in the coming weeks."
In company news, Lloyds Banking Group (LBG) shares slid 0.66 percent to 80.89 pence after the British government sold another 1.0 percent in the state-rescued lender for £500 million ($754 million, 694 million euros), matching last month's sale.
The Treasury announced in a statement that the move has trimmed its stake from 24 percent to just under 23 percent, under plans to return LBG to private hands.
Britain still owns a large chunk of Lloyds after bailing it out with £20 billion of taxpayers' cash at the height of the 2008 global financial crisis.
Asian equities mostly fell Monday, dragged down by expectations the US could soon raise interest rates, while Tokyo took a hit from news Japan's economy grew slower than thought in the last quarter of 2014.
Tokyo stocks fell 0.95 percent after the government downgraded growth for the October-December period to 0.4 percent from 0.6 percent.