The euro hit a nearly nine-year low versus the dollar on Monday as investors bet on quantitative easing by the European Central Bank while soft manufacturing surveys pushed down shares and sent oil prices to 5 1/2-year lows.
European shares are expected to dip, with Britain's FTSE seen falling by up to 0.4 percent. Germany's DAX and France's CAC are both seen falling as much as 0.2 percent.
The euro fell to as low as $1.18605, its weakest level since March 2006, having fallen below an important support at $1.20. The common currency last traded at $1.1926, down 0.6 percent from late U.S. trade on Friday.
Economists forecast that Wednesday's euro zone inflation data will show that in December prices fell 0.1 percent, the first decline since 2009.
That should fan expectations the ECB could ease its policy as soon as Jan. 22, when it holds its first policy meeting this year.
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