The euro struggled near a two-month low as the eurozone debt crisis showed signs of spilling over from Ireland to other countries even after Ireland unveiled an ambitious austerity plan.
Traders said Portugal and increasingly Spain are seen as potentially in need of help while Dublin's belt-tightening plan has come under fire for sticking to economic growth assumptions, unveiled earlier this month, seen as too optimistic.
Trade was thin, however, due to the US Thanksgiving holiday on Thursday. Some market players said the fall in the euro as well as in the Aussie reflected short-covering in the US dollar on rising US yields and before the holiday.
The euro shed 0.2 percent on the day to trade at $1.3312. It pierced through major support around $1.3333 to hit a two-month low of $1.3284 on Wednesday.
Next support is pegged at $1.3232, a 61.8 percent retracement of the August to November rally, a break of which could see the single currency target $1.3000.
Against the Japanese currency, the euro fell 0.2 percent to 111.15 yen after having fallen to 110.32 yen on Wednesday, a level last seen in mid-September. The euro has fallen about 10 points after peaking at $1.4283 on November 4, shortly after the proposal was made.
The yield spread of Portuguese and Spanish government bonds over benchmark German Bunds hit a euro-lifetime high on Wednesday. Technically the currency looks vulnerable after breaking below key support of $1.3364, a 38.2 percent retracement of its rally from June to early November and its August high and other major support around $1.3333.
The currency has also fallen below support from the bottom of the cloud on the daily ichimoku chart, which stood at $1.3371, sending a major bearish signal. The last time it fell through the ichimoku cloud was December 2009, preceding its six-month-long downtrend. For now, its 100-day moving average, now just above $1.33, and its 200-day moving average around $1.3134, may offer some support.
Few see a return to the four-year low of $1.1876 marked in June in the wake of debt crisis in Greece as yet. The dollar index, which tracks the greenback's performance against a basket of major currencies, flirted with a two-month high just short of 80.000 overnight and was last at 79.69, down slightly on the day. The dollar fell 0.1 percent to 83.50 yen, though many traders expect it to stay in its well-worn range around 82.80-83.80 in the near term.
The Aussie dollar dropped 0.3 percent to $0.9771, failing to maintain its initial rise sparked by Wall Street gains. Position adjustments ahead of the US holiday and selling by Japanese investors were among factors cited as hurting the Aussie, and more stop-losses are seen below $0.9720.
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