The euro slipped to a four-month low against the dollar on Tuesday as a political stalemate in Greece stoked fear the country may renege on bailout pledges made to international creditors and exit the currency bloc. Concerns about slowing Chinese and global growth also drove down higher-yielding currencies and boosted the safe-haven dollar and yen, with the Australian dollar flirting with a five-month low against the US currency.
The euro gained a foothold around support at $1.2827, the 76.4 percent retracement of its rally earlier this year from $1.2624 to $1.3486. The common currency last stood at $1.2827 after having fallen as low as $1.2814, its lowest in nearly four months. A clear break of that retracement level could open the way for a test of the January low of $1.2624, though some analysts said the euro could enjoy some rebound in the short term, having fallen more than three percent so far this month. The euro's fall saw the dollar index rising to a four-month high of 80.739 as the index c limbs a bove its peak in March.
Against the yen, the dollar moved little at 79.91 yen, above a 2-1/2-month low of 79.428 yen hit last week, with major support seen at 79.14, a 61.8 percent retracement of its rally from February to March. The Australian dollar briefly fell to a five-month low of $0.9945, after the Reserve Bank of Australia's minutes of its May policy meeting showed concerns about a cooling in growth and inflation were behind its unexpected 50 basis point rate cut earlier this month. The currency, however, has managed to float above a major support at $0.9945-50, the 61.8 pct retracement of its climb from October to February. It last stood at $0.9983.
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