The euro fell on Thursday after the European Central Bank's governing council expressed concerns about the exchange rate "overshooting" in the minutes of its July meeting.
Few clues were given to when the ECB would announce it will start tapering its asset purchases - a first step in tightening monetary policy as it looks to wind up its €2tn quantitative easing programme.
The council was broadly satisfied that financial conditions remained supportive of economic expansion, but remarked on "re-pricings" in foreign exchange and bond markets that had "led to some deterioration since the previous meeting".
Certainly, core inflation has fallen sharply in recent months as the stronger euro, through the higher costs of selling goods overseas and lower costs of buying foreign goods, means the eurozone has effectively been exporting inflation.
But concerns were expressed, particularly about the risk of the exchange rate "overshooting" in the future. How much appreciation represents an overshoot was not defined in the minutes.
Steps towards taper
There were few clues as to the likely timing of a taper announcement.
The language of the minutes was, as usual, careful in tone, expressing the need to "gain more policy space and flexibility", underlining the ECB's cautious "wait and see" stance.
"Today's minutes fit into the picture of an ECB which wants to steer and moderate the process towards tapering extremely cautiously," said Carsten Brzeski at ING.
Kathleen Brooks at City Index said the minutes suggested that "the ECB won’t take any steps to normalise monetary policy unless some of the froth comes off the euro".
The euro fell sharply against its main rivals after the minutes were published.
The dollar gained 0.6% against the single currency to $1.1699, while the pound added 0.5% to €1.1007.
European equity markets were lower, with the EuroStoxx 50 index falling 0.3%.