The 17-nation currency fell against majors after dovish comments from Fitch and expectations of slowdown in Germany by Destatis.

The euro once again came under pressure after Fitch Ratings said on Tuesday Italy is in the brink of having its credit rating cut. Also, it said a number of euro-area economies, including France and Spain, are under review for a possible downgrade at the end of the current month.

Furthermore, Fitch predicts the euro area to relapse into a shallow recession this year as the severe spending cuts by governments are likely to continue affecting businesses and households' consumption and confidence.

What added to recession worries is that Destatis said German growth pace eased to 3.0% growth in 2011 from 3.7% expansion in 2010, while it expects 0.25% drop in the fourth quarter.

Tomorrow and on Friday Spain plans to sell 5 billion euros of bonds maturing in 2015 and 2016 and Italy is expected to auction 3-, 5- and 15- year bills, noting that both countries may reach an aggregate bond selling of 262 billion euros in the first quarter, according to Deutsche Bank AG forecasts.

Concerning the EUR/JPY pair, it fell after two days of rising to trade around 97.75 after recording a high of 98.36 and a low of 97.57.

The trading range for the week is expected among the key support at 94.50 and the key resistance at 99.60.

Moreover, the dollar index, which tracks the dollar's movement versus a basket of major currencies, rebounded to touch a high of 81.36 compared with the day's starting level of 80.86.

Moving to the GBP/USD pair, it fell sharply on the daily charts as fears in markets damped demand on the pound and high-yielding currencies.

The pair is currently hovering around 1.5390 while recording a high of 1.5490 and a low of 1.5366, while the trading range for this week is among key support at 1.5075 and key resistance at 1.5780.