* Uncertainty over Greek aid continues
* EU and IMF clash over Greece
* Weak ZEW data highlights problems facing Germany
* Fears about U.S. "fiscal cliff" favor dollar
By Gertrude Chavez-Dreyfuss
NEW YORK, Nov 13 The euro hit a more than
two-month low against the dollar and a one-month trough versus
the yen on Tuesday, weighed down by delays in aid for
debt-burdened Greece and persistent uncertainty about whether
Spain will seek a bailout.
Worries about Greece and Spain have caused the euro to lose
value against the safe-haven dollar in seven of the last nine
trading sessions. So far in November, the euro has fallen 1.9
percent against the dollar and 1.7 percent against the yen.
Greece's international lenders gave the country more time to
fix its budget, though they did not disburse the aid Greece had
hoped to use to refinance 5 billion euros of its debt by Friday.
A public clash between Greece's international lenders over
how Athens can bring its debts down to a sustainable level has
fueled fears that Europe's troubles could flare up anew.
"When those overseeing resolution to the euro zone crisis
continue to disagree, it becomes very difficult to instill
confidence in investors," said Sean Cotton, foreign exchange
adviser at Bank of the West in San Ramon, California.
In late trading, the euro was slightly lower at
$1.2704, having earlier dropped to $1.2660, its lowest since
A weak German ZEW sentiment survey heightened concerns about
the impact of the euro zone crisis on Europe's largest economy
and knocked the euro earlier in the session.
However, a German newspaper report that Germany wants to
bundle Greek aid into a single payment of more than 44 billion
euros caused the euro to bounce off a two-month low. Traders
interpreted the report, which cited government sources, as a
sign that the euro zone's largest economy was eager to see a
German Finance Minister Wolfgang Schaeuble confirmed on
Tuesday that European Union finance leaders discussed giving
Greece a single payment instead of three tranches. But if the EU
were to decide to do one payment, Schaeuble said there should be
control mechanisms in place.
Meanwhile, speculation that Spain, the euro zone's
fourth-largest economy, will formally request a bailout buoyed
the country's bonds and helped put a floor on the euro's
"Spain bailout speculation caused Spanish bonds to rally
strongly, but I do not believe Spain will ask for a bailout
before important elections later this month and they may even
wait longer, perhaps until next year," said Marc Chandler,
global head of FX strategy at Brown Brothers Harriman in New
The euro should gain if Spain requests a bailout because it
would set the stage for the European Central Bank to buy its
debt to lower its borrowing costs.
Matthew Lifson, senior trader and analyst at Cambridge
Mercantile Group in Princeton, New Jersey, said the euro
continues to be under pressure on the technical charts, with the
resistance now firmly in the $1.2720 area.
"Look for the market to continue to probe lower, slowly at
first as the euro approaches the $1.2665 area," said Lifson.
"With continued concern in Europe over Greece and Spain, the
selling mentality should remain."
In the United States, the focus remained on the fiscal
cliff, a series of massive budget cuts and tax hikes that will
take effect if Congress cannot agree on a deal by the end of the
year. The concern bolstered the dollar on safe-haven flows.
"Investors are fearful the U.S. economy could slam on the
brakes early next year if lawmakers on Capitol Hill don't come
up with a long-term debt fix," said Joe Manimbo, senior market
analyst at Western Union Business Solutions in Washington.
The dollar index was up slightly at 81.102, having
earlier hit a two-month high of 81.241. The dollar index has so
far gained 1.4 percent this month.
Against the yen, the dollar was down 0.1 percent at 79.38