The common currency fell against the American dollar and other major currencies for the second consecutive day after the Standard & Poor's (S&P) agency cut the credit rating of the Italy, increasing fears about the future of the recovery in the global economy.

The rating was lowered to A from A+, raising the negative outlook for the recovery cycle, while S&P also indicated Italy's net general government debt is the highest among A-rated sovereigns, and now expects it to peak later and at a higher level than it previously anticipated.

Moreover, the European debt crisis expanded along with the downgrade for the U.S. government's credit rating, damping demand for higher yielding currencies and pushed the market to shift their investment for safe haven.

During the year, Italy follows Spain, Ireland, Portugal, Cyprus and Greece as euro-region countries having their credit rating cut.