The common currency's losses were limited as the S&P move closely followed Fitch Ratings' downgrade of Spain by two notches to double A-minus last week, dealers and analysts said.
"Such a downgrade was already expected, and now the market is looking toward expected capital injections by governments in the euro zone, which would be supportive for the euro," said Koji Fukaya, director of fixed income and global foreign exchange research at Credit Suisse.
Still, Fukaya and other observers say there is little room for optimism. The euro will likely remain stuck in a $1.3500-$1.4000 range in the coming weeks as investors remain hesitant to buy the unit amid talk of bigger losses for private investors holding Greek debt, Fukaya said.
The euro was down at $1.3737 at 0025 GMT from $1.3781 late Thursday in New York, and at Y105.65 from Y105.96. The dollar was little changed against the yen at Y76.89 from Y76.90. The ICE Dollar Index, which measures the greenback against a basket of currencies including the euro and yen, was at 77.200 from 77.036.
Ahead of a meeting of Group of 20 finance ministers and central bank governors in Paris this weekend, dealers said they would be watching for any developments on plans to deal with the European sovereign debt problems and their fallout.
"The market will be very sensitive to any headlines out of the G-20," with particular attention on any developments in talks about the size of haircuts on Greek debt, said Tsunemasa Tsukada, a senior foreign exchange dealer at Mitsubishi UFJ Trust & Banking.
In Asian trade, trade the release of China's consumer price index for September could stir the market if it adds to concerns that inflation is advancing despite cooling elsewhere in the economy, dealers said. The CPI likely rose 6.2% on year in the month, staying at an uncomfortably high level that would reinforce the case for official rhetoric emphasizing price stability, according to the median forecast in a Dow Jones poll of economists.
Any stronger-than-expected result could spark tightening concerns that could hit equities to the detriment of risk-sensitive currencies, Mitsubishi UFJ Trust & Banking's Tsukada said.
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