Euro slips in Asia

The euro slipped on Thursday, pulling further away from a 4-1/2 month high versus the dollar on heightened worries that political instability in Portugal may force it to become the latest country in the region to seek a European Union bailout.
The single currency slipped to the day's low of $1.4071 as concerns about weakness in debt-heavy eurozone economies were highlighted by a media report that ratings agency Moody's would downgrade the credit ratings of Spanish banks on Thursday.
Market participants said the euro could slide further to $1.40 in the near term. Traders said light stop-loss orders were creeping below that level on Thursday.
The euro was little changed on the day at $1.4085, having slipped as low as $1.4071. Traders said a further slide had been stemmed by bank bids around the $1.4070 area.
The euro has retreated after its rise earlier this week stalled at $1.4249, its highest level since early November. The mid-$1.3850 region is considered key support, given that the single currency rose to $1.3862 in early February during a sharp rally at the start of the year. It later pulled back before embarking on its latest climb.
Above that, the euro could be cushioned in the $1.4015-55 area, which contains a series of intraday highs hit earlier this month. Some analysts say the euro is unlikely to enter a protracted downtrend at this point, given expectations the European Central Bank will raise interest rates as early as April.
This would support the single currency as it would boost its rate differential against the dollar and other lower-yielding currencies.
The euro's latest drop gave some reprieve to the dollar. The dollar index, which measures the dollar's value against a basket of currencies, edged up 0.2 percent to 75.936, clinging to the gains it made on Wednesday.
Against the yen, the dollar held steady from late US trade at 81.00 yen. Sterling was flat at $1.6230, on the backfoot after it fell on Wednesday when the British government cut its growth forecasts and said borrowing would fall more slowly than hoped.