- The euro fell to session lows against the dollar in risk-off trade on Thursday as concerns over turmoil in emerging markets weighed, ahead of preliminary data on U.S. fourth quarter growth.

EUR/USD hit 1.3586, the lowest since January 23 and was last down 0.56% to 1.3586.

The pair was likely to find support at 1.3529, the low of January 23 and resistance at 1.3664, the session high.

Unease over emerging economies intensified after the Federal Reserve rolled back its bond purchasing program by another $10 billion to $65 billion-per-month at its policy meeting on Wednesday.

Emerging economies such as Turkey and South Africa rely heavily on foreign investor flows to fund their current account shortfalls, making them particularly vulnerable to a reduction in global liquidity as the Fed scales back stimulus.

Risk aversion was also fuelled by renewed concerns over a slowdown in China after revised data on Thursday showed that China’s HSBC manufacturing index ticked down to a six-month low of 49.5 this month, below the preliminary estimate for 49.6.

The euro shrugged off data showing that the number of unemployed people in Germany fell by 28,000 in December, outstripping expectations for a decline of 5,000. The German unemployment rate was unchanged at 6.8%.

A separate report showed that Spain’s recovery picked up in the fourth quarter, with gross domestic product expanding by 0.3%, up from 0.1% in the three months to September.

The euro fell to two-month lows against the yen, with EUR/JPY down 0.32% to 139.27 and edged lower against the pound, with EUR/GBP dipping 0.07% to 0.8241.

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