Sentiment remained fragile on foreign exchanges as concerns over eurozone debt markets lingered.
In spite of the efforts of Ireland in presenting its austerity plan on Wednesday, the euro remained largely unloved as uncertainty prevailed.
With political tensions rising in Dublin, holders of Irish sovereign debt have been punished by the risk that the budget will not be passed next month, which would delay any bail-out from international lenders.
“While a successful conclusion of negotiations on an aid package could help stem some of the recent euro downslide, it is difficult to see a more substantial euro recovery ahead of the budget vote,” said Tim Lewis at Currencies Direct.
Pressure on bondholders intensified after clearing house LCH.Clearnet said it was raising its trading charges on Irish debt, while German central banker Axel Weber suggested that in future bail-outs, bondholders must share the burden.
Irish bonds remained under pressure, with yields trading at about 8.7 per cent. Spain was an increasing concern as the yield on its 10-year note has risen more than 100 basis points since the beginning of the month, and is now trading above 5 per cent.
“Another couple of weeks of rising bond yields could force Spain’s hand to go to the fund if continuing to finance itself in the capital markets becomes untenable,” said Kathleen Brooks at Forex.com.
“The more likely a Spanish bail-out becomes, the more investors are going to sell the single currency.”
Most investors in the US were absent as they celebrated Thanksgiving, however, and the markets had what many traders tend to call a “sideways” feel about them.
This left many currency pairs trading flat. The euro was fractionally lower against the dollar at $1.3327, and slipped 0.1 per cent to Y111.32 versus the yen. It lost 0.6 per cent against a broadly stronger Swiss franc to SFr1.3351.
The dollar was up 0.1 per cent versus the yen at Y83.60 and climbed 0.1 per cent to $1.5752 against the pound.
Sterling was undermined by dovish comments from Bank of England governor Mervyn King, who said “strong action” against inflation would risk destabilising the economy.
The pound fell 0.1 per cent to £0.8456 against the euro and 0.1 per cent to Y131.58 versus the yen.
The South Korean won made back some lost ground after falling heavily on Tuesday following a military clash with North Korea.
It was up 0.4 per cent to Won1,142.65 against the dollar and climbed 0.5 per cent to Y13.6615 against the yen.