Euro inches up in Asia

The euro inched up on Wednesday after a drubbing the previous day but remained near 11-week lows against the dollar in a market waiting to see what European policymakers will do next to contain worries abouteuro zone debt. The euro suffered yet another setback as Standard & Poor's threatened to cut the credit ratings of Portugal, but then stabilised above the previous day's low of $1.2969, a level not seen since mid-September.
Still, while small recoveries are not ruled out few expect that its trials are over, with downside targets now at about $1.2800 and then its August lows around $1.2600. The euro was also near 11-week lows against the yen after falling 1.8 percent on Tuesday, and 10-week lows against sterling after premiums on Spanish and Italian bonds over German debt rose their highest in the euro's lifetime. Citing uncertainties stemming from the risk of Portugal having to seek international financial aid, S&P put the country's A-minus rating on review for possible downgrade.
S&P's warning came after Ireland secured an 85 billion euro ($110 billion) bailout package on Sunday, seven months after Greece was thrown a lifeline to tackle its debt problems. On Wednesday, though, the euro edged up to $1.3020 after languishing below $1.3000 for much of the session, with support at about $1.2795, a 61.8 percent retracement of its June-November rally, and resistance at about $1.3060.
The euro has fallen 9 percent from its November high of $1.4283 and shed 7 percent in November alone, the biggest monthly fall since May. The dollar index, which tracks the greenback's performance against a basket of other major currencies, rose to its highest since September 20 on Tuesday at 81.444 and was stable on Wednesday just below its 200-day moving average of 81.78.
The yen has fared the best in the past 24 hours as investors have unwound yen-funded positions in higher yielding currencies and Japanese exporters bought the yen. The dollar dipped to 83.38 yen, its lowest level in a week and retreating a full yen from a two-month high of 84.41 yen hit on Monday. The Aussie was at $0.9593, up 0.1 percent.