The euro slid to almost a two-year low against the dollar on Tuesday as worries about Spain's soaring borrowing costs and its troubled banks looked set to prompt more selling of the common currency. The euro fell 0.6 percent to $1.2464, after hitting a session low of $1.2461 on Reuters data, the weakest since July 1, 2010. Losses accelerated after the downgrade from Egan-Jones and as the currency fell beneath $1.25 - a key psychological level.
The next downside target lies around $1.2450, where traders reported stop-loss sell orders and option barriers. The euro also slipped 0.7 percent to 98.97 yen. It had earlier dropped to 98.91 yen, the lowest since January. The dollar was down 0.1 percent at 79.38 yen, not far from a recent three-month low of 79.002 yen set on trading platform EBS. Against the Swiss franc, the dollar climbed to a 15-month high of 0.9633 and was last up 0.5 percent at 0.9625 franc.