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Weaknesses in the German economy were underlined by a poor reading from the Ifo economic research institute in Munich.
According to Tom Vosa, head of market economics at nabCapital in London, the sharp downturn in the German economy, as in other countries, will increase pressure on the European central bank to aggressively cut interest rates.
"[The reading] was truly awful and suggests that the fall in output in the euro zone's largest economy gained both momentum and traction in the fourth quarter," he told Reuters.
Some experts believe the Ifo data highlights the growing reality that the continent is currently going through a recession, reports Reuters.
The euro slumped to a session low of 119.58 against the yen.
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