* Euro holding at 11-week lows, more downside seen
* S&P says may cut Portugal's credit ratings
* Market wants to see more pre-emptive action
By Charlotte Cooper
TOKYO, Dec 1 (Reuters) - The euro continued to struggle across the board on Wednesday, stuck near 11-week lows against the dollar as the market waited to see what European policymakers would do next to try to contain worries about euro 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 at 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.
Analysts said the market was looking for more pre-emptive action from policy makers in the region, after a rescue package for Ireland at the weekend, as pressure in the euro zone bond market was widening to more countries including Belgium.
"The general feeling is that this is a mess that is not going to be easily escaped," said Robert Ryan, FX strategist at BNP Paribas in Singapore.
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 on Sunday secured an 85 billion euro bailout package, seven months after Greece was thrown a lifeline to tackle its debt problems.
Markets worry other debt-ridden euro zone countries such as Portugal and Spain will also need aid and if so whether the region can really afford it. Portugal's prime minister said it was not facing any pressure to ask for a bailout and did not need any such help.
"You really need some aggressive action from the authorities in Europe to try and calm nerves and that's really the key at this stage," said Greg Gibbs, strategist at RBS in Sydney.
The next event to focus on is a European Central Bank meeting on Thursday, which analysts say has taken on added significance as confidence in the region has deteriorated.
Investors will be looking for comments on how the ECB could help address growing anxiety in the credit and currency markets, and Ryan at BNP said the ECB could eventually be forced into making more government bond purchases.
For now though the euro edged up to $1.3010 after languishing below $1.3000 for much of the session, with support at about $1.2795, which is the 61.8 percent retracement of its June to 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.
Momentum indicators like stochastics signal its fall is well and truly stretched, building the risk for a rebound, but chartwise scope for a recovery, at least in the near term, is seen a limited to $1.3060-$1.3100.
It fell to 108.33 yen on Monday, a level last seen on Sept. 15, the day Japan intervened to stem yen strength, and plumbed a record low versus the Australian dollar at about A$1.3515. It was last at 108.55 yen on Wednesday.
The dollar has been a beneficiary of the euro's problems, which has helped fuel a retrenchment in investor confidence, denting higher-yielding currencies such as the Australian dollar.
The dollar index, which tracks the greenback's performance against a basket of other major currencies, rose to its highest since Sept. 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, but was making little headway in Asian trade.
It was stable versus the dollar at 83.62 yen after the dollar retreated from a two-month high of 84.41 yen on Monday.
Meanwhile, the Australian dollar dipped to its lowest since late September at $0.9536 after Australian GDP data for the third quarter showed the economy grew less than expected in the period and suggested there was no urgency for the central bank to tighten interest rates again soon.
The Aussie was last at $0.9571, down 0.1 percent. (Additional reporting by Ian Chua in Sydney, Hideyuki Sano in Tokyo and FX analysts Krishna Kumar in Sydney and Rick Lloyd in Singapore; Editing by Edwina Gibbs)