The EUR declined against the Dollar and Yen for a third day as concern about the Euro-Zone's banking system fanned strains in money markets, boosting demand for Dollars across the board. Weighing on the EUR was the Spanish central bank's takeover of savings bank CajaSur on Saturday after a failed merger with another regional lender.

The single currency, however, recouped some losses in afternoon trading after the Conference Board said its index of confidence among U.S. consumers rose this month to the most in more than two years, adding to optimism growth in the world's largest economy may be strong enough to withstand a European slowdown.

The EUR downtrend has so far stalled at $1.2280, stopping well shy of the currency's January 1999 launch rate at $1.1747, but analysts say currencies' tendency to overshoot estimates of where they should be means further weakness is likely.