* Euro tumbles to one-year low beneath $1.31
* Debt contagion fears grow; Spain says not seeking aid
* Aussie slides after RBA hikes but signals pause ahead
* Dollar helped by stronger U.S. data
(Updates prices, adds comment)
By Steven C. Johnson
NEW YORK, May 4 (Reuters) - The euro tumbled to a one-year
low against the dollar on Tuesday on fears aid for Greece may
not prevent debt crises in other euro zone countries, prompting
anxious investors to seek shelter in the U.S. currency.
The euro fell below $1.31 for the first time since April
2009 while the dollar rose around 1 percent or more against the
Swiss franc and sterling as well as the Australian and Canadian
dollars. Investors snapped up safe-haven U.S. Treasuries and
punished riskier U.S. <.SPX> and European equities <>.
"There is no faith in what the EU and IMF have proposed for
Greece," said Dean Popplewell, chief currency strategist at
OANDA, a foreign exchange brokerage in Toronto.
"Capital markets are betting on a Greek default, as
Greece's own populace is not going to accept the terms of this
rescue, and contagion is a real concern hurting the euro."
Even with Greece set to receive 110 billion euros in
emergency loans from the European Union and International
Monetary Fund, investors remain on edge about the fiscal health
of other euro zone countries, especially Spain and Portugal.
The IBEX 35 index <> of Spanish shares was down more
than 5 percent. Spain's prime minister dismissed as "complete
madness" a market rumor the country would soon ask for a 280
billion euro loan from the euro zone. []
Analysts also cited concern about Greece's ability to enact
promised spending cuts as union strikes in the country shut
down tax offices, schools and hospitals. []
The euro <EUR=> was off 1.3 percent to $1.3028, according
to Reuters data, just above a one-year low touched earlier in
the global session.
Popplewell said traders were gunning for $1.30, which he
said may be tough to pierce on Tuesday. "But once it goes, the
euro will fall like a lead weight, with $1.25 possible," he
said.
AUSSIE SLIPS, U.S. GROWTH PICKING UP
The Australian dollar <AUD=D4> slid 1.8 percent, its
biggest one-day drop since February, to $0.9099 <AUD=D4> after
the Reserve Bank of Australia raised interest rates but hinted
that the first stage of tightening was over. []
Traders said China's recent monetary tightening added to
pressure on other commodity-linked currencies such as the
Canadian dollar, which fell 1.1 percent to C$1.0222 per U.S.
dollar <CAD=>.
Sterling fell 0.9 percent to $1.5111 <GBP=D4> ahead of
Britain's May 6 parliamentary election, while the dollar was
unchanged at 94.52 yen <JPY=> after earlier hitting 94.98 yen,
its strongest since Aug. 24. The euro fell 1.3 percent to
123.03 yen <EURJPY=>.
"There is definitely an air of pessimism spreading across
markets today," said Samarjit Shankar, managing director of
global FX strategy at BNY Mellon in Boston.
Traders said the dollar, which rose to its highest level
since May 2009 against a basket of six major currencies <.DXY>,
was supported by signs that the U.S. economy was on the mend.
Data released on Tuesday showed pending U.S. home sales
rose 5.3 percent in March while factory orders increased 1.3
percent that month. Both numbers handily beat forecasts.
A report on Monday that showed U.S. manufacturing
registered its fastest pace of growth in nearly six years last
month helped, and investors expect Friday's payrolls report to
show another month of job gains in April.
Strong economic data has also reinforced views that the
Federal Reserve could raise interest rates this year, while
Europe's debt woes are likely to keep euro zone rates on hold
in 2010.
(Additional reporting by Wanfeng Zhou in New York; Editing by
Andrew Hay)
