By: Barbara Zigah

The Euro’s slide to an 11-month low appears to have skidded to a halt, but the common currency remains vulnerable to further losses so long as the Eurozone crisis is unresolved. Also making investors jittery is the possible downgrade from the credit ratings agencies, as investors wonder when the threat will be carried out. In the short term, however, solid economic data from the U.S. and a Spanish bond sale that at least did not disappoint helped to give the Euro a lift. As reported at 12:15 p.m. (JST) in Tokyo, the Euro was trading at $1.3034, off the $1.2945 low struck earlier this week, a total decline of 2.5% thus far.

What is worrying investors most this time around, says a senior trader in Tokyo, is France’s credit rating. The loss of its current AAA rating could reverberate to an extent not yet seen; already the spread on French bonds relative to German bunds is widening to unforeseen levels. Christian Noyer of the European Central Bank condemned the threat against France’s credit rating, saying it was unjustifiable, and that the credit ratings agencies are basing their decision on politics and not economics.