TOKYO (Fox News/Reuters)--The euro steadied near 14-month lows against the dollar on Friday on concerns that rigorous fiscal tightening in Europe would dampen an already-weak recovery.
The New Zealand dollar was on the defensive after sluggish retail data reaffirmed expectations of a subdued recovery in the country, which will temper expected interest rate rises from the central bank this year..
The battered euro was at $1.2545, up 0.1% from levels seen in New York on Thursday. The single-currency is on the way to ending a volatile week in negative territory against the dollar after a massive $1 trillion emergency rescue package reached on Monday boosted it to near $1.31.
Traders said euro buying has been coming in when the euro nears the $1.25 level in Asian trade, where players suspect some large option barriers are in place.
It hovered around 1.4010 Swiss francs, holding above a record low of 1.3997 francs hit on trading platform EBS on Thursday.
Still, the outlook for the euro was bearish with investors nervous over the commitment and resolve of EU member states to make significant inroads into consolidating fiscal positions.
"While some euro zone members' efforts to cut fiscal spending are welcomed, investors are wondering how long efforts will be sustained," said an FX trader at a major Japanese bank.
"Investors are also worried that fiscal tightening will hamper growth in Europe."
