European stocks were set to open lower after heavy losses on Asian bourses overnight, with the US dollar, now seen as the best-option safe haven currency, benefitting from swelling risk-aversion.

"The US dollar is benefitting in the current environment, while high beta emerging market and commodity currencies are proving to be the most sensitive to risk aversion," said Credit Agricole analysts in a note.

"This is reflected in a jump in USD speculative positioning over recent weeks, with current IMM positioning at its highest since June 2010."

The franc has traded in a narrow band against the euro since the Swiss National Bank said in early September it would target a lower limit of 1.20 francs per euro to ease pressure on Swiss exporters and prevent the economy from slipping into recession.

"The euro continues to be driven by various rumours and event risk while weak economic data will continue to undermine the currency," said Credit Agricole analysts.

The franc firmed 0.3 percent against the euro compared to Friday's New York close, trading at 1.2194 francs per euro at 0710 GMT.

The franc fell 0.3 percent against the dollarto 0.9087 francs per dollar.

While the SNB has reiterated its 'utmost determination' to enforce the lower limit it set in early September, some analysts suggested traders may be gearing up to test the central bank's resolve.

"The impact of similar comments seems to have an increasingly smaller impact, as financial markets by now have taken note" of the SNB position, said UBS economist Reto Huenerwadel.