RTRS: Euro stays soft near lows as debt crisis festers
* Euro below ichimoku cloud base, in downtrend
* Fears of debt crisis contagion undermine euro
* Liquidity thin due to U.S. Thanksgiving holiday
(Updates prices; adds quote)
By Anirban Nag
LONDON, Nov 25 (Reuters) - The euro came under renewed pressure, dipping close to two-month lows against the dollar on Thursday, as the euro zone debt crisis showed little signs of abating and fears of contagion kept investors nervous.
Traders said Portugal and increasingly Spain were seen as potentially in need of financial help while Ireland's belt-tightening measures came under fire for sticking to optimistic growth assumptions.
Foreign exchange trading volumes were, however, light due to the U.S. Thanksgiving holiday.
"Things are a bit sidelined due to the U.S. holiday but there is still a lot of nervousness about euro zone peripheral debt problems. So the euro remains a sell into rallies and not a buy on dips," said Paul Mackel, director of currency strategy at HSBC."
European clearing house LCH.Clearnet raised on Thursday the margin requirements to trade Irish government debt, citing widening spreads over triple-A euro zone benchmarks. [ID:nLDE6AO0AB].
The cost of insuring Irish debt against default rose while Spanish and Portuguese yields pushed higher. The rising spreads in Spain have triggered speculation over whether the funds available under a euro zone financial safety net would be sufficient to help a large country if needed.
The euro was down 0.2 percent on the day at $1.3300, trading below its 100-day moving average at $1.3303, having hit a two-month low of $1.3284 EUR= on Wednesday. Traders said option expiries at $1.3350 were likely to check any gains.
The next support is pegged at $1.3232, a 61.8 percent retracement of the August to November rally, a break of which could see the single currency test its 200-day moving average at $1.3133.
The currency has fallen below support from the bottom of the cloud on the daily ichimoku chart, which stood at $1.3371, sending a major bearish signal. The last time it fell through the cloud was December 2009, preceding a six-month-long decline.
The euro lost 0.12 percent against the yen, at 111.20 yen EURJPY=R. It fell to 110.32 yen on Wednesday, a level last seen in mid-September.
