FOREX-Euro slides, hits multiyear low below $1.19

                                
 * Euro bounces off low to trade near flat
                                
 * Above-forecast German factory orders help euro
                                
 * Dollar seen as safe haven when risk aversion rises
                                
 * Euro zone debt, Hungary concerns linger
 (Adds comments, details; changes byline)
                                
 By Steven C. Johnson and Vivianne Rodrigues
                                
 NEW YORK, June 7 (Reuters) - The euro fell below $1.19 on
Monday for the first time in more than four years, but
recovered some losses as strong German manufacturing data
prompted investors to book profits after the currency's recent
slide.
                                
 European corporate demand helped the euro rebound after it
touched $1.1876 <EUR=EBS> -- its weakest level since March
2006.
                                
 But it remained well below $1.20, a key psychological level
pierced on Friday after Hungary's warning about its deficit
stoked investor worries of the severe debt problems plaguing
some European countries.
                                
 "After Hungary's warning and weaker-than-expected U.S. jobs
data on Friday, selling got a bit overdone," said Amelia
Bourdeau, senior strategist at UBS in Stamford, Connecticut.
                                
 "But what investors are doing is waiting for short squeezes
like this that push the euro up and then preparing to re-enter
short positions," she added. "Things were overdone last week
but there isn't much on the horizon that's euro-positive."
                                
 Data on Friday showed speculators trimmed net short
positions on the euro slightly in the week ended June 1, but
were still heavily positioned against the currency, which has
lost nearly 17 percent against the dollar in 2010. [IMM/FX]
                                
 The euro <EUR=> last traded down 0.1 percent at $1.1961. On
Friday, it tumbled 1.5 percent after a weaker-than-expected
U.S. jobs report suggested the global recovery may be running
out of steam diminished investor taste for risk and enhanced
the dollar's safe-haven appeal. Stocks traded near flat after
tumbling on Friday.
                                
 The euro was down little changed at 110.03 yen <EURJPY=>
while the dollar rose 0.1 percent to 91.99 yen <JPY=>. The euro
hit a record low at earlier 1.3850 Swiss francs <EURCHF=>, down
0.4 percent.
                                
 The yen and Swiss franc, along with the dollar, typically
gain when risk aversion is high, while investors tend to avoid
currencies tied more closely to growth or commodity prices,
such as the Australian dollar <AUD=D4>, which fell 0.5 percent
to $0.8196 on Monday.
                                
 Sterling rose 0.2 percent to $1.4490 <GBP=D4> while the
euro earlier fell to an 18-month low at 82.12 pence <EURGBP=D4>
as traders said investors were moving out of German bunds and
into UK gilts amid fears of continued debt woes in the euro
zone.
                                
 Traders say the next option trigger for the euro comes at
$1.1850 and a likely target at $1.1825, the euro's March 2006
low. Below that, traders saw little support until its November
2005 low of $1.1638, though the euro's 1999 launch level of
$1.1747 was also a potential key marker.
                                
 But the road there will be a winding one. The euro's "come
an awfully long way in recent days and it won't head lower in a
straight line," said Paul Robson, a currency strategist at RBS
in London.
                                
 DATA BOOST, DEBT WOES PERSIST
                                
 A bigger-than-expected jump in German industrial orders and
reasonable demand at an offer of Belgian government debt were
helping to bolster the euro Monday, market participants said.
[ID:nTAR001846] [ID:nLDE656107]
                                
 But debt concerns have not disappeared.
                                
 Hungary -- a member of the European Union but not the euro
zone -- added to market jitters on Friday when the incoming
government said the country might be facing a Greek-style
crisis. [ID:nLDE6550I7]
                                
 That reignited fears about European banks' exposure to the
debt of some European countries.
                                
 While the problems in Hungary are not considered as severe
as those in Greece, some analysts say it may be more vulnerable
to crisis since it is not in the euro zone and does not use the
euro.
                                
 "Greece can't devalue or easily default on its debt, but
presumably Hungary can, so it's a double-edged blade," said
Michael Woolfolk, senior strategist at BNY Mellon in New York.
                                
 Euro zone governments will issue about 27.5 billion euros
worth of new bonds this week, with Spain, Portugal and Italy
all due to hold auctions. [GVD/EUR]
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For a graphic of European banks' exposure to Hungary,
double-click:
http://graphics.thomsonreuters.com/10/HN_BNKXP0610.gif
For a graphic on CFTC futures positioning, double-click
http://graphics.thomsonreuters.com/10/CFTC_CURR.html
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