The euro strengthened against the dollar and yen on speculation a reintroduction of loans to banks by the European Central Bank will buoy crisis-ridden markets. 
The 17-nation currency weakened earlier as ECB President Jean-Claude Trichet said the region’s economy is facing “intensified downside risks.” The pound fell after the Bank of England unexpectedly expanded its bond-purchase plan. 
The franc dropped for a third day against the euro on speculation the central bank will impose further measures to contain its strength after imposing the cap last month at 1.20 per euro.