* Euro slides on euro zone debt concerns
* S&P revises U.S. long-term ratings outlook to negative
* Newspaper says Greece asked IMF/EU to restructure debt
* Finnish vote result sparks uncertainty on Portugal
(Adds quote, details; updates prices)
NEW YORK, April 18 (Reuters) - The euro slumped broadly on
Monday, as concern increased that Greece will be forced to
restructure its debt and uncertainty over a bailout for
Portugal grew.
Rising risk aversion generally weighed on the single
currency after Standard & Poor's, while affirming the
'AAA/A-1+' sovereign credit rating on the United States,
revised their outlook on the long-term rating to negative from
stable. For details, see []
While the dollar fell against the yen hewing to the risk
aversion theme, the impact on the euro was greater because
Europe's problems are already manifest. While U.S. fiscal
tensions are increasing, the U.S. is far from defaulting on its
debt.
"The prospect of an actual default by the U.S. on debt
issued in its own currency isn't a realistic worry, in a
financial market that has a lot more real worries to deal with
(including genuine euro zone default risks,)" said Avery
Shenfeld, chief economist at CIBC World Markets in Toronto.
"We are less concerned over a downgrade to the outlook than
we are about the growth implications of turning to fiscal belt
tightening before the economy has self-sustaining momentum."
The euro <EUR=> was last trading down 1.7 percent at
$1.4185, with the session low at $1.4155 -- a two-week low --
according to Reuters data. German government sources said they
expected Greece will not make it through the summer without
debt restructuring though Athens denied a debt rescheduling was
imminent. []
The euro's rise has stalled since it hit a 15-month high
last week, though market players expect it to be supported by
prospects of another rise in euro zone interest rates.
Earlier a Greek newspaper reported that Greece had told the
IMF and the European Union earlier this month that it wants to
restructure its debt, though it pared losses as a finance
ministry source in Athens said the story was untrue.
[]
Players also are watching Portugal's progress toward a
bailout closely after strong gains in a weekend election by an
anti-euro party in Finland that has vowed to veto its rescue
package. []
Analysts doubted the Finnish vote could do more than slow
down a bailout, but the result of the vote added to negative
euro sentiment, encouraging investors to cut long positions.
NEGATIVE OUTLOOK
Standard & Poor's cited huge budget deficits and rising
government indebtedness as the reason for the U.S. outlook
revision with the path to addressing those issues not being
clear.
But "the dollar is still the safe haven of first and last
resort, said Michael Woolfolk, senior strategist at BNY Mellon
in New York.
The last time the U.S. was put on review for a possible
downgrade was in January 1996 after Republicans refused to vote
to increase the debt ceiling, said Kathy Lien, director of
research at GFT in New York. However, this was extremely
short-lived because the outlook was upgraded back to stable in
March after the U.S. government raised the debt ceiling.
Moody's Investors Service said on Monday, Washington's
debate over its budget is positive despite uncertainty over the
outcome, as it is a potential change in the direction of fiscal
policy but made no changes to its ratings or outlook.
[]
The euro fell its lowest in almost three weeks against the
yen <EURJPY=>. It last traded at 116.45, down 2.7 percent.
Euro/yen fell below a cluster of support in the 119.20 yen
to 119.30 yen area that coincides with some intraday lows hit
earlier in April. A trader for a Japanese bank said the euro
could drop toward 115 yen in the near term.
The dollar also hit its lowest in almost three weeks
against the yen to around 82.16 yen <JPY=>, before recovering
slightly to 82.34 yen, down 0.9 percent on the day.
