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* Euro declines to record low vs Aussie dollar
* Policy decisions due this week in euro zone, U.S., UK
* Expectations for ECB actions high, but bank may disappoint
By Wanfeng Zhou
NEW YORK, July 30 (Reuters) - The euro fell on Monday , hitting a record low against the Australian dollar, on worries the European Central Bank may disappoint investors hoping for more actions to contain the debt crisis.
Expectations for the ECB, which holds its policy meeting on Thursday, have grown sharply after P r esident Mario Draghi said last week the bank would do whatever it takes to save th e euro, a message echoed by German Chancellor Angela Merkel and French President Francois Hollande.
Some in the mark et speculated the ECB may reactivate its bond-buying program to help r educe S panish and Italian borrowing cost s, but many were skeptical because Ge rmany has repeated its opposition to such a step. [ ID:nL6E8IT375]
"Traders were in a 'show me' mode with enthusiasm fading over last week's comments by both Mario Draghi and Angela Merkel in support of the euro," said Boris Schlossberg, managing director of FX strategy at BK Asset Management i n New York.
German Economy Minister Philipp Roesler warned the ECB about any large-scale government bond purchases and a German government spokesman on Monday reiterated Berlin's opposition to any form of mutualisation of euro zone debt.
The euro fell 0.6 percent to $1.2241, retreating from a three-week high of $1.2389 hit on Friday but holding above a two-year low of $1.2040 hit Tuesday, according to Reuters data.
Adding to bearish sentiment was the euro's failure to close above a key technical level near $1.2325 on Friday.
Still, near-term losses in the euro could be limited as traders were unlikely to place large bets ahead of the ECB meeting, analysts said.
"Clearly, if nothing is announced that would be a massive disappointment," said Callum Henderson, global head of FX research for Standard Chartered Bank in Singapore. "But there is an expectation that we're going to see something meaningful on Thursday."
Analysts said the ECB might instead explore new policy tools such as outright asset purchases, or quantitative easing, something its peers in Britain, the United States and Japan are already using to stimulate growth.
There have also been recent suggestions it could empower national central banks to broaden their asset buying abilities.
Markets will keep an eye on any comments from U.S. Treasury Secretary Timothy Geithner, who is due to discuss the U.S., European and global economies with German Finance Minister Wolfgang Schaeuble and Draghi on Monday.
Markets were bracing for a busy week, with central bank decisions due in the United States and the UK as well as the euro zone, in addition to key U.S. jobs data on Friday.
The euro fell 0.9 percent to 95.80 yen, though it remained above last week's low of 94.09 yen, its lowest level against the Japanese currency in more than 11-1/2 years.
It also struggled against the Swedish crown, which hit a 12-year high after data showed the Swedish economy grew much more than expected in the second quarter. The euro fell 1.5 percent to 8.3370 crowns.
The Australian dollar rallied, reaching a record high of around A$1.1652 against the euro and a four-month high of $1.0499 versus the U.S. dollar.
Many market players said the Australian currency's gains could be vulnerable however, given its close correlation with the global growth outlook.
"People are selling euro/Aussie and that provides Aussie/dollar with an indirect degree of support. But exposure there is pretty big if we get any negative economic developments in Asia and if Draghi and (Federal Reserve Chairman Ben) Bernanke do not deliver," said Daragh Maher, FX strategist at HSBC.
"Our view is we would sell Aussie on any firm break above $1.0500."
The Federal Reserve begins a policy meeting on Tuesday and its decision will be announced on Wednesday, but economists expect policymakers to sit on their hands for now.
The dollar was steady at 82.786 against a basket of major currencies, rebounding from a three-week low of 82.343 on Friday. Against the yen, the dollar eased 0.3 percent to 78.18 yen.