The EUR stabilized against the dollar on Monday but remained under downward pressure after Fitch Ratings downgraded Spain's credit rating, refueling concern about Europe's debt woes hurting the global economy. By yesterday's close, the EUR rose slightly against the USD, pushing the oft-traded currency pair to 1.2300 levels. The 16-nation currency did see some bearishness as well as it lost around 80 pips against the GBP and closed at 0.8460.

Spain's downgrade by Fitch ratings agency on Friday followed a similar move by S&P last month, and analysts said the reaction from currency markets had been limited as the move had been widely expected. But many say the EUR is poised for more losses after its dramatic tumble this month given that structural problems remain in some euro zone countries, while uncertainties about the scope of the debt crisis in the region will keep investors jittery.

The European single currency is on track for a hefty 7.7% decline against the dollar in May, in what would be its sixth straight monthly fall and the biggest percentage drop since January 2009.