The euro continued its slide against the US dollar in the morning session, mirroring investors' lack of confidence in the continent's ailing economies.
Ahead of the G20 summit in Canada this weekend, investors sold European stocks, bonds and currencies, adding to the pressure on EU politicians to resolve their differences and agree a 27-member growth package.
Analysts have warned that extreme budget cuts in the US, Britain, Spain, Greece and Germany will dent growth and job and income creation.
"Concerns over the resilience of the US recovery, weak technicals in the S&P 500 and renewed concerns over the health of UK banks (...) have all increased risk aversion ahead of this weekend's G-20 summit in Toronto," said Jane Foley, research director at Forex.com.
The European currency lost 0.5% to $1.2269 by noon.
Royal Bank of Canada wrote in a research note: "Austerity measures today may address sovereign fiscal problems, but the longer-term potential ramifications on corporates, consumption and economic growth of such tightening can create challenges in their own right."
