Investing.com - The euro firmed against the dollar in early Asian trading Thursday, erasing losses after taking another bruising fueled by global market fears that the European debt crisis is escalating.
EUR/USD hit 1.2991 during early Asian trading, up 0.06%, firming after a session low of 1.2981 and a high of 1.2994.
The pair was likely to find support at 1.2947 an earlier Thursday low, and resistance at 1.3048, Wednesday's high.
Spikes in Italian yields during the auction earlier in the day stoked fears that despite a recent E.U. summit where almost all member nations agreed on greater fiscal integration, debt and solvency issues are so severe that without immediate response, the currency zone may break up.
Furthermore, Fitch Ratings downgraded five European financial institutions, including Banque Federative du Credit Mutuel, Credit Agricole, Danske Bank, OP Pohjola Group and Rabobank Group.
"While ratings for these banks are driven by idiosyncratic factors that determine how they rank in relation to each other and the wider rating universe, the downgrades reflect the broader phenomenon of stronger headwinds facing the banking industry as a whole," Fitch said in a statement.
"Exposure to troubled eurozone countries through their subsidiaries was a direct consideration in the downgrades of Danske Bank and Credit Agricole. For the other banks, however, Fitch considers the eurozone crisis is also having negative indirect consequencesm," Fitch added.
"Capital markets, in particular interbank markets, are not functioning effectively, and along with more global factors, the crisis is driving economic slowdown."
In the U.K. high unemployment rates also fueled fears the continent was sliding closer to a recession.
The U.K. jobless rate hit a 17-year high in the three months ending October, with 2.64 million people out of work.
"The unemployment rate is the highest since 1996 and the number of unemployed people is the highest since 1994," the Office of National Statistics said in a statement.
In Europe, industrial output in the eurozone shrank 0.1%, in line with expectations.
Talk that the U.S. Federal Reserve was putting any fresh monetary easing on hold for a while made dollar-denominated like Treasuries an attractive safe have as European uncertainty continues.
Also in the U.S., crude supplies shrank by 1.9 million barrels, while gasoline inventories rose by 3.8 million barrels, which did little to affect the currency pair.
The euro, meanwhile, was up slightly against the pound, with EUR/GBP dipping 0.02% to trade at 0.8396.
Later Thursday, the U.K.will release retail sales data, while the German Manufacturing Purchasing Managers' Index will publish.
European unemployment data will hit the wire as well.
In the U.S., wholesale inflation data will come out as will the closely watched initial jobless claims figures, which measure the number of individuals filing for unemployment insurance for the first time during the past week.
EUR/USD hit 1.2991 during early Asian trading, up 0.06%, firming after a session low of 1.2981 and a high of 1.2994.
The pair was likely to find support at 1.2947 an earlier Thursday low, and resistance at 1.3048, Wednesday's high.
Spikes in Italian yields during the auction earlier in the day stoked fears that despite a recent E.U. summit where almost all member nations agreed on greater fiscal integration, debt and solvency issues are so severe that without immediate response, the currency zone may break up.
Furthermore, Fitch Ratings downgraded five European financial institutions, including Banque Federative du Credit Mutuel, Credit Agricole, Danske Bank, OP Pohjola Group and Rabobank Group.
"While ratings for these banks are driven by idiosyncratic factors that determine how they rank in relation to each other and the wider rating universe, the downgrades reflect the broader phenomenon of stronger headwinds facing the banking industry as a whole," Fitch said in a statement.
"Exposure to troubled eurozone countries through their subsidiaries was a direct consideration in the downgrades of Danske Bank and Credit Agricole. For the other banks, however, Fitch considers the eurozone crisis is also having negative indirect consequencesm," Fitch added.
"Capital markets, in particular interbank markets, are not functioning effectively, and along with more global factors, the crisis is driving economic slowdown."
In the U.K. high unemployment rates also fueled fears the continent was sliding closer to a recession.
The U.K. jobless rate hit a 17-year high in the three months ending October, with 2.64 million people out of work.
"The unemployment rate is the highest since 1996 and the number of unemployed people is the highest since 1994," the Office of National Statistics said in a statement.
In Europe, industrial output in the eurozone shrank 0.1%, in line with expectations.
Talk that the U.S. Federal Reserve was putting any fresh monetary easing on hold for a while made dollar-denominated like Treasuries an attractive safe have as European uncertainty continues.
Also in the U.S., crude supplies shrank by 1.9 million barrels, while gasoline inventories rose by 3.8 million barrels, which did little to affect the currency pair.
The euro, meanwhile, was up slightly against the pound, with EUR/GBP dipping 0.02% to trade at 0.8396.
Later Thursday, the U.K.will release retail sales data, while the German Manufacturing Purchasing Managers' Index will publish.
European unemployment data will hit the wire as well.
In the U.S., wholesale inflation data will come out as will the closely watched initial jobless claims figures, which measure the number of individuals filing for unemployment insurance for the first time during the past week.