* Euro down on German minister's fiscal stability remarks
* Dollar rallies broadly on Japan, Russia G20 view
* Euro falls 2 cents intraday to below $1.33 <EUR=>
(Recasts, adds comment, updates prices, changes byline,
changes dateline, previous LONDON)
By Nick Olivari
NEW YORK, March 27 (Reuters) - The euro fell across the
board on Friday after Germany's finance minister said fiscal
irresponsibility in Europe could put the currency at risk,
while the dollar drew extra support ahead of next week's Group
of 20 leaders' meeting.
The yen also rallied on last-minute fund repatriation by
Japanese investors ahead of fiscal year end and expectations
for further flows to Japan due to a change in tax regulation.
Against the dollar's broad support, German finance minister
Peer Steinbrueck's comments, weaker-than-forecast euro zone
industrial orders and German inflation data triggered
pre-placed euro sell orders, traders said.
The euro was "damaged by comments from Germany's finance
minister who warned that the currency would be threatened if
countries refused to take the stability pact seriously," said
Geoffrey Yu, currency strategist at UBS in London in a research
note.
Steinbrueck told the German parliament that the euro was at
risk if the European Union's Stability and Growth Pact, which
governs the region's rules on budget deficits, is not taken
seriously. []
In early New York trade, the euro was down 1.6 percent on
the day at $1.3319 <EUR=>, having fallen as low as $1.3277 from
an intraday high of $1.3591 and $1.3550 just before
Steinbrueck's remarks, according to Reuters data.
The euro lost more than two full cents on the day to hit a
week low of $1.3277, severely testing the strength of long-term
technical support at the 200-week moving average of $1.3380.
The euro was 2.6 percent down against the yen at 130.08 yen
<EURJPY=>, while the dollar was down 1.1 percent against the
yen at 97.65 <JPY=>.
EYES ON G20, DOLLAR
Data on Friday showed that euro zone new industrial orders
slumped 34 percent year-on-year in January, while German state
inflation data ahead of the national figure showed consumer
prices falling in March. <ECON>
The European Central Bank is widely expected to cut
interest rates by 50 basis points to 1 percent next Thursday
but may also announce further liquidity-boosting measures.
[]
The yen's broad gains were boosted by dealers picking up
the Japanese currency at cheap levels following this week's
slide and on repatriation ahead of the fiscal year-end. The
dollar gained 2.2 percent against they yen this week.
Analysts though, were not so sure those gains would hold.
"The Japanese yen is recouping some of the week's losses
against the dollar and the euro (after six weeks of gains) but
the yen rally is likely to be short lived as we head into the
new quarter," said Marc Chandler, global head of currency
strategy at Brown Brothers Harriman in a note to clients.
The dollar's broad gains were bolstered by comments from a
senior official at Japan's Ministry of Finance and a senior
Russian central bank official that the dollar will remain the
world's reserve currency for some time.
This cooled some of the fervour surrounding the debate on
the dollar's long-term status as the world's reserve currency.
Some traders are unnerved by the debate after U.S. Treasury
Secretary Timothy Geithner said he was "quite open" to
exploring the idea of expanding the use of the IMF's Special
Drawing Rights.
(Additional reporting by Jamie McGeever and Tamawa Desai in
London, Editing by Chizu Nomiyama )
