* Euro slips as market awaits details on Greek aid
* Investors also worried about Portugal, Ireland
* Yen gains broadly on risk aversion
* US Consumer Confidence rises more than expected
(Adds comments, updates throughout)
By Vivianne Rodrigues
NEW YORK, April 27 (Reuters) - The euro fell against the
dollar on Tuesday as lack of clarity surrounding financial aid
talks for Greece and worries over credit risk in other euro
zone countries weighed on the single currency.
Heightened risk aversion hit the euro while boosting the
dollar and the yen. European shares fell as markets awaited
details of financial aid Athens is seeking from the European
Union and International Monetary Fund to help pay its debts.
"No news on the aid package to Greece is bad news for the
euro right now," said Sacha Tihanyi, a currency strategist at
Scotia Capital in Toronto.
"When we get the details of the package, hopefully this
week, we may see a quick short-covering rebound in the euro,
but until then, any upside potential is limited," he said.
The spread between Greek and German government bond yields
swelled earlier to its widest in 12 years as investors demanded
higher premiums to hold Greek debt.
In mid-morning trading in New York, the euro was 0.7
percent lower at $1.3307 according to Reuters data. The single
currency traded as low as $1.3278 earlier after hitting a
one-year low around $1.32 on Friday.
Tihanyi said a break below $1.32 in the euro may pave the
way for further declines to another resistance area at $1.30.
The cost of insuring Greek debt hit a record high as did
that of Portugal, reflecting wider euro zone credit risk which
some analysts said could potentially create cracks in the euro
system.
"Markets are really concerned about sovereign debt issues
in Europe," said Brian Dolan, chief currency strategist at
Forex.com, in Bedminster, New Jersey. "Greek (credit default
swaps) spreads are hitting Argentine levels today."
German Chancellor Angela Merkel's party said on Tuesday it
would bring up the subject of haircuts on Greek debt with the
European Central Bank and the IMF on Wednesday. []
Berlin also has demanded Athens take painful austerity
measures in return for aid. []
Athens needs to secure funding before a May 19 debt
rollover deadline.
While the euro was coming under pressure from the
negotiations over Greece's debt in relation to a broad array of
currencies, the U.S. dollar was garnering some support from
economic data.
In the United States, a measure of consumer confidence rose
in April to the highest level since the collapse of Lehman
Brothers in September 2008, according to a private sector
report released on Tuesday. []
"That is a good number and should give the dollar some
support," said Joseph Trevisani, chief market analyst at FX
Solutions in Saddle River, New Jersey. "We have been seeing
weakness in consumer outlook and this has, at least
temporarily, reversed that."
Against a currency basket <.DXY> the dollar rose 0.3
percent to 81.789.
RISK TRADE
Against the yen, the single European currency fell to as
low as 124.09 yen <EURJPY=R> but rebounded to 124.43 yen, down
1.1 percent on the day. General risk aversion often benefits
the low-yielding Japanese currency.
"We're still looking at the unwinding of the risk trade,"
said Dolan at Forex.com.
The dollar <JPY=> slipped 0.4 percent to 93.60 yen, after
touching a session low at 93.39 yen.
Greece formally asked for aid on Friday and talks between
the government, the European Union and International Monetary
Fund were under way in Athens.
Germany's Merkel has said she supports aid for Greece
because the euro's future is at stake, but has consistently
taken a tough line on offering potential help. The aid talks
come just before a May 9 regional election in Germany.
(Additional reporting by Steven C. Johnson in New York and
Naomi Tajitsu in London)
(Editing by Theodore d'Afflisio)
