The euro slipped against the dollar and yen on Tuesday, undermined by German sentiment data that was slightly below expectations and comments from European Central Bank officials saying they were prepared to do more to support the region's fragile recovery.
The data on Europe's biggest economy came a day after ECB President Mario Draghi said the bank was ready to provide more long-term loans to keep money-market rates from rising. Data from the Ifo think tank on Tuesday showed that German business morale improved slightly in September to touch a 17-month high, but the index fell short of the consensus forecast.
The euro was flat under $1.35. Support was cited at the August high of $1.3453. Large options expiries were reported at $1.3500 and $1.3200.
(Read more: Euro zone business activity powers ahead)
ECB President Mario Draghi's comments on Monday that the central bank was prepared to offer banks more long-term loans to keep money-market rates from rising to levels that could hurt the economy, also dragged on the euro.
(Read more: Merkel wins resounding victory in German election)
His message was reinforced by ECB Governing Council member Ewald Nowotny, who said on Tuesday it was too soon for the bank to go into exit mode from its crisis measures
"The market sentiment wasn't helped by the slightly softer Ifo numbers and also the Draghi comments suggesting that the outlook remains uncertain and that there is a good chance there would be more monetary easing," said Paul Robson, currency strategist at RBS.
For more on currency prices, please click here.