The euro fell against the dollar on Tuesday as uncertainty about debt-laden Spain prompted some traders to book profits after driving the single currency to a four-month high. Pressure is growing on Spain to request aid and trigger a European Central Bank bond-buying programme seen as inevitable to help the country finance its debts, with benchmark 10-year Spanish bond yields rising to just over 6 percent.
The euro has risen more than 8 percent since hitting a two-year low around $1.2040 in July, fuelled by aggressive central bank actions in both Europe and the United States to help their struggling economies. But that euphoria is starting to wear off. The euro fell 0.5 percent to $1.3051, with traders reporting selling by Europeans. It had hit a high of $1.3169 on Reuters data on Monday, its highest since May 4. Option barriers were seen around $1.32. The euro fell 0.6 percent against the yen to trade at 102.63 yen, having rallied to a four-month high of 103.82 yen on Monday. The dollar slipped 0.1 percent to 78.62 yen.
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