* Euro struggles after 3 days of decline
* Fitch warning on U.S. banks adds to contagion fears
* Aussie under pressure, eyeing parity vs USD
SYDNEY, Nov 17 (Reuters) - The euro wallowed at five-week lows versus the dollar and yen in Asia on Thursday as bond market turmoil spread across Europe (Chicago Options: ^REURUSD - news) , sparking calls for the European Central Bank to intervene more forcefully in markets.
Investors were also nervously watching to see how German financial markets will react after Moody's cut the ratings of 12 German public-sector banks, believing they are likely to receive less federal government support if needed.
The euro stood at $1.3441, versus $1.3492 late in New York, and was not far off Wednesday's trough around $1.3430 -- a low not seen since Oct (KOSDAQ: 039200.KQ - news) . 10. Support is seen at $1.3399, a level representing the 76.4 percent retracement of the October rally, ahead of $1.3375, the 78.6 percent retracement.
Souring the mood further, Fitch warned it may downgrade its "stable" outlook for U.S. banks, because of contagion from problems in troubled European markets.
"While U.S. banks have been under scrutiny for some time over their exposure to Europe, an explicit warning from the ratings agency amplified market concerns over the extent and impact of contagion," said analysts at BNP Paribas (Other OTC: BNPQF.PK - news) .
French borrowing costs continued to rise on Wednesday and ECB buying of Italian and Spanish debt failed to reassure markets. There were also growing signs of strain in money markets, with euro zone banks finding it harder to obtain dollar funding.
However, Germany remained resolutely opposed to letting the central bank take a bigger role in resolving the debt crisis, even though many analysts believe the only way to stem the contagion is for the ECB to carry out the sort of quantitative easing undertaken by the U.S. and British central banks.
All these factors helped drive the dollar index to its highest level in five weeks. The index was at 78.366, having risen as high as 78.397 on Wednesday.
As usual, commodity currencies bore the brunt of the dip in risk appetite with the Australian dollar shedding another cent to reach a five-week low at $1.0050, from Wednesday's high of $1.0185.
"The AUD/USD remains under downward pressure and could try to push under parity to a support pivot point of $0.9986 in the near term," said Besa Deda, chief economist at St. George Bank.
Among the G3 currencies, dollar/yen remained a sea of calm as the danger of more intervention by Japan (EUREX: FMJP.EX - news) kept markets wary. Dollar stood at 77.05 yen, having carved out a slim trading range roughly between 76.80 and 77.20 since the Oct. 31 intervention.
There is no major Asian economic data on Thursday, leaving the focus firmly fixed on developments in Europe.
The new Italian prime minister is expected to present an austerity programme to the upper house on Thursday, while Athens is thrashing out a deal with private bondholders to cut its public debt, sources say. (Editing by Wayne Cole)
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