Europe's growth woes

Signs of economic distress are mounting across the euro zone, and confidence in Germany, the bloc's largest member, has plummeted. Olli Rehn, a member of the European Central Bank's Governing Council, said growth risks strengthen the case for the ECB to resume easing at its meeting next month.

Over the past six weeks, Aspect Capital Ltd's quantitative models have switched from shorting the euro to long it, with the euro having a chance to rise against the pound, franc and Norwegian krone. Mount Lucas Management LLC expects the euro to continue to rise against the dollar to 1.20.

Elias Haddad, senior market strategist at Brown Brothers Harriman, said the euro will almost certainly pare its gains as the Fed has not eased as much as the market expected compared with the Bank of China.

"We still believe that the divergence remains and should continue to support the dollar," Haddad said. "The market is too pessimistic about the U.S. economy."