"There appears no end in sight in the near-term for an end to economic contraction in the fiscally challenged euro-zone members," said Lee Hardman, currency analyst at Bank of Tokyo-Mitsubishi.

Top European shares .FTEU3 were down 0.3 percent in early trading thinned by the summer lull. Indexes in London .FTSE, Paris .FCHI and Frankfurt .GDAXI were all lower, following weakness in Asia and keeping global indexes .MIWD00000PUS on the back foot despite positive U.S. retail sales data.

"The weakening growth outlook is likely to lead to more aggressive monetary easing from the ECB, weakening the euro further ahead," Hardman added.

Those hopes have helped European stock markets enjoy a strong run over the last few weeks, though investors have grown nervous while they wait to see if action lives up to expectations.

ECB President Mario Draghi has said the bank will flesh out plans to bring some stability back to strained euro zone bond markets early next month, driving hopes the bloc could start to right itself again in the second half of the year.

In contrast, prices of German bonds - favored by risk-averse investors - hit a six-week low, while the euro was marginally up at $1.2336 against a broadly higher dollar.

Jane Foley, a senior FX strategist at Rabobank, said that after the deluge of continental European data the previous day, the UK would be in focus on Wednesday.

"The markets are relatively quiet. We had some divergent global data, and as always there is some focus on the euro zone and Greece, so that is bubbling in the background."

"But today sterling and UK markets will probably take centre stage as we have the Bank of England minutes. Everyone is expecting them to remain dovish. Even with stronger UK inflation, we think that the bank will ease again before the year end."

(Reporting by Marc Jones; Editing by Will Waterman)

• A Permanent Economic Emergency