The single currency fell to $1.4113, its weakest since mid-August, also pressured by a 2 percent slide in European shares in early trade.

While euro sentiment remains firmly negative, traders cited sovereign demand in the $1.4110-1.4100 region, which limited selling in the near term, while technical support at $1.4110 was also seen.

Other currencies perceived to be higher risk, including the Australian and New Zealand dollars, also took a hit against the dollar, while the greenback hit a one-month high versus a currency basket.

The suspension of an EU/IMF mission to Greece late last week has cast doubts on whether Greece can cut its budget deficit enough to secure another tranche of bailout funds, while Italy's inability so far to meet its budget commitments continues to hammer its sovereign bond market.

Analysts see more downside risks to the euro after a big fall in support for Angela Merkel's Christian Democrats in a regional vote in Mecklenburg-Vorpommern on Sunday highlighted the German chancellor's waning popularity as Europe's top economy bears the brunt of assisting its heavily indebted neighbors.

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The Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners, rose 0.3 percent to 74.970, after gaining 1.3 percent last week. The Stoxx Europe 600 Index of shares fell 2.3 percent and the MSCI Asia Pacific Index slid 2.6 percent. Gold futures in New York climbed above $1,900 an ounce.

Shayne Heffernan

Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.

Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services. www.livetradingnews.com