The EUR/USD remained close to 14 month lows today in Asia as continued fears of a Greek collapse and a Fitch downgrade of Portugal kept investors hesitant to buy the single European currency. The Fitch rating downgrade of Portugal to AA- pushed the Euro off the proverbial cliff yesterday and it has yet to recover as traders fear the possibility of a domino effect taking place if Greece falls, Portugal, Spain, Italy, and Ireland might not be far behind. A divided Euro Zone will begin meetings later in the day that will culminate on Friday. The fear for the European currency is that if there is no accord between EU members on a possible fix for this situation, it could fall even further. The pair had dropped to new lows just under 1.3290 late in the day on the back of Chinese comments stating concern for sovereign debt.

Risk was decidedly soft in Asia, with the yen crosses drifting lower over the length of the day. EUR/JPY slid off of 123.00 highs to post a 70 pip loss by the London open. The same moves were evident in AUD/JPY, GBP/JPY and CHF/JPY as well. USD/JPY pushed to an almost three month high near 92.40, on a weaker yen which in turn helped boost the Japanese Nikkei higher today. New Zealand GDP data came in right in line early in the day, dragging the AUD/NZD to a low near 1.2895.

Late comments out of China concerning fears of sovereign debt issues pretty much stated the obvious, but the markets are decidedly tense due to this as the situation is clearly tenuous. Adding to this the recent reports stating Greece could leave the EU and start a chain reaction of collapsing nations due to sovereign debt has the market on edge, and that is surely not good for the Euro.