The euro and commodity currencies looked set to consolidate overnight gains in Asia on Tuesday, having been boosted by hopes that European officials will finally make some progress in tackling their debt crisis this week. But ever conscious that policymakers can easily disappoint yet again, markets will be hard pressed to keep pushing the common currency higher in the absence of concrete action, traders said. There was little reaction in Asia to news Fitch had cut the credit outlook for the United States to negative, though it expected no move on the actual rating until late 2013. The euro stood at $1.3317, having risen more than 1 percent on Monday to a high of $1.3398. The move came even after the IMF firmly denied an Italian newspaper report it was in talks to bail out Italy. Traders said markets were simply looking for an excuse to cut bearish positions on the euro and commodity currencies, after going short risk ahead of the U.S. Thanksgiving holiday. The euro had dropped some 7 percent from the Oct. 27 peak of $1.4247 to a trough of $1.3210 on Friday. \"We remain cautious as the market remains vulnerable to headline risk ahead, with the Eurogroup/Ecofin meetings taking place over the next two days,\" BNP Paribas analysts said. Euro zone finance ministers meet later on Tuesday to approve detailed arrangements for scaling up the EFSF rescue fund to help prevent contagion in bond markets. They are also expected to release a vital aid lifeline for Greece. Germany and France reportedly aim to outline proposals for a fiscal union before a European Union summit on Dec 9, increasingly seen by investors as possibly the last chance to avert a breakdown of the single currency area. \"Policymaking in Europe seems to be moving in the direction of further integration, which is positive, but uncertainty remains about getting there in time to save the euro. A breakup of the euro zone can be avoided, but bold measures are needed soon,\" Jose Wynne, analyst at Barclays Capital wrote in a note. The firmer euro saw the dollar index recoil from a seven-week peak of 79.702 to 79.203. The dollar, though, extended gains on the yen, rising to as high as 78.20 from a trough of 76.55 on Nov. 18. Commodity currencies, hit hard in the last few weeks, were among the best performers on Monday. The Australian dollar was at $0.9911, having jumped more than two full cents at one stage on Monday. Key resistance is seen at $1.0080, the 38.2 percent retracement of the fall from $1.0753 on Oct. 27 to $0.9664 on Nov. 23. Renewed worries about the euro zone will also flare up if any of this week\'s bond auctions, by the likes of Italy and Spain, were to fail. Belgium on Monday sold €2bn of bonds, but its 10-year borrowing costs rocketed by nearly 130 basis points after the country\'s credit rating was downgraded. Italy plans to raise up to €8bn in the bond market later on Tuesday. Traders said markets could be encouraged to take profits on Monday\'s rally after Fitch warned it may cut its triple-A rating on the United State in late 2013 if policymakers fail to come up with a \"credible plan\" to reduce the country\'s ballooning budget deficit.