As there were indications that the euro zone’s debt crisis is spreading to its banking system, this took the euro down against the dollar. Matthew Strauss, senior currency strategist at RBC Capital Markets in Toronto said: "The ECB warning on Monday set the stage for euro selling. Markets remain jittery and overall risk sentiment is bearish."
Analysts said: "The focus will now shift to reports on the US labor markets due later this week, and euro selling pressure is likely to continue."
The euro was down 0.5 percent against the dollar at $1.2240. Against the yen, the euro traded 0.71 percent lower at 111.45 yen. The dollar was down 0.2 percent against the yen at 91.04 yen.