The euro hit a fresh nine-month low against the dollar on Wednesday after Italy said it fell into recession again in the second quarter, June German industrial performance slumped and investors grew more cautious over the conflict in Ukraine.
The dollar reached an 11-month high against a basket of major currencies, boosted by a move by investors away from currencies seen as higher-risk, amid reports Russian troops had gathered on the Ukrainian border.
Around 20,000 Russian troops massed on Ukraine's eastern frontier were creating a "dangerous situation", NATO said on Wednesday. It warned that Moscow could use humanitarian concerns as a pretext to send troops across the border.
That, as well as the data showing Italy's economy unexpectedly shrank in the second quarter, drove the euro to near $1.33, its lowest since early November before it recovered to trade shy of $1.34.
"All of this is adding to the headwinds of an already weak recovery in the euro zone, encouraging bets on more aggressive European Central Bank easing, weighing on the euro," said Valentin Marinov, head of European G10 currency strategy at Citigroup.