The euro extended its unrelenting fall on Wednesday, dropping more than 1 percent to below $1.06 for the first time in 12 years as the European Central Bank's 1.1 trillion bond-buying program hammered the region's bond yields to record negative levels.
The single currency has declined 12 percent since January and is about 5 percent from parity against the greenback, Reuters data showed. It last traded at $1.0550 against the dollar.
"It could easily reach parity in the short term,'' said Athanasios Vamvakidis, head of European G10 foreign exchange strategy at Bank of America Merrill Lynch in London.
The euro fell against other major currencies. It struck a seven-year low against sterling at 70.145 pence and an 18-month low of 128.17 yen. It last traded at 70.60 pence against the British pound.
The ECB on Monday began buying sovereign bonds to try to boost growth and inflation in the euro zone, sending yields on the debt of nearly all its countries to record lows and driving investors away from the euro.
German two-year Schatz yields fell to a record low of minus 0.241 percent, while French two-year yields hit a low of minus 0.149 percent.
"You have very weak yields in the euro zone,'' said Charles St. Arnaud, currency strategist at Nomura Securities International in New York. "People are selling euro fixed-income assets to diversify away from the euro.''