Investors cashed in their profits on the euro in the past week, further eroding earlier heady expectations of a quick rally to match the dollar one-for-one.
The currency dropped to US$0.9266 in closing trade on Friday from $0.9553 a week earlier.
After gaining ground against the dollar on fears of a hard landing for the US economy, the euro was forced into a retreat when a strong rise in German jobless figures on Tuesday raised concerns about the euro zone.
A healthy rise in US productivity, which was up 2.4 percent in the last three months of 2000, soothed some of the concerns about the world's biggest economy and further undercut support for the euro.
On Thursday, the European currency dropped below the psychological support level of 0.92 dollars.
Traders suddenly lost faith in earlier forecasts that the euro could rise to parity with the dollar in the short term.
The euro had thus lost three cents in three days, said a report by economists at BNP-Paribas, blaming profit-taking by investors who had been disappointed by the euro's performance.
The rapid and aggressive action by the US Federal Reserve, which cut interest rates by one percentage point in January, and the prospect of further easing ahead, strengthened belief in that scenario.
Traders were set to focus on Federal Reserve chairman Mr Alan Greenspan's testimony to Congress on Tuesday.
The outlook for the euro on the markets is now uncertain and it is threatened with further falls after dropping below $0.92 in late Thursday trade.
AFP