"The dimmer outlook was acknowledged by outgoing ECB President Mario Draghi, a cautious tone that gave added traction to the euro's slide from three-month highs," said Joe Manimbo, senior market analyst at Western Union.
"Add it all up and it seems increasingly less likely that the ECB would be able to normalize monetary policy later this year."
In Britain, May is widely expected to retain power in the confidence motion at 1900 GMT on Wednesday, called by opposition Labour Party leader Jeremy Corbyn after a crushing defeat of the prime minister's Brexit divorce deal in parliament on Tuesday.
Defeat of the deal left the country's withdrawal from the European Union in disarray just 10 weeks before it is due to leave.
Although the pound had sunk by more than 1 percent against the dollar early on Tuesday, it rallied after the parliamentary vote on the deal as investors saw the defeat as forcing Britain to pursue different options regarding the EU.
As a consequence, the single currency fell as much as 0.3 percent against the pound in early trade, hitting a seven-week low of 88.44 pence, and was trading at around 88.55 pence by 1524 GMT, down 0.21 percent on the day.
The dollar eased 0.17 percent to 108.83 yen after advancing 0.5 percent against its Japanese peer overnight, amid a further ebb in risk aversion with US stocks posting strong gains.