AFP - The European single currency slid on Tuesday as a major downgrade to a key Chinese economic indicator persuaded many investors to seek the safe-haven dollar and yen.
The euro dipped to 1.2190 dollars from 1.2276 dollars late in New York on Monday. Against the Japanese currency, it sank to 107.82 yen, the lowest point since late November 2001, before pulling back slightly.
The dollar, meanwhile, dived close to a two-month low of 88.53 yen in earlier Asian trade. It later stood at 88.75 yen, down from 89.35 on Monday.
"If concerns over the strength of the US recovery were not bad enough the market has now been rattled by increased fears that growth in China may be less rapid than previously expected," said Jane Foley, research analyst at trading website Forex.com.
"These fears swept across the market following news that the US conference board had revised lower its China index."
She added: "This morning's set of poor Japanese economic data increased fears regarding the resilience of the global recovery."
Economist Derek Halpenny, at The Bank of Tokyo-Mitsubishi UFJ in London, said traders were now seeking the safety of the US dollar and the Japanese yen.
"The financial markets remain in risk averse mode, with the dollar and the yen performing well in response to the downgrade of economic data in China that hit confidence," Halpenny said.
"The Conference Board leading index actually increased just 0.3 percent in April and not 1.7 percent as originally reported, which has raised fears over the loss of momentum in the Chinese economy."
Analysts said the euro was under pressure from the upcoming bond auctions in the 16-nation eurozone.
A large number of bonds will be issued, particularly in Spain on Thursday, while the European Central Bank has set Wednesday as the deadline for its 12-month refinancing operation.
"The single currency continues to be the currency-market whipping boy as markets continue to adopt a risk-averse approach to currencies with sterling being one of the main beneficiaries of the euro's woes," said CMC Markets analyst Michael Hewson.
He added: "With debt auctions later this week in France and Spain, and rather weak demand for Italian paper yesterday, markets remain concerned about the solvency of EU nations."
Traders were also unwilling to bet big ahead of US monthly employment data Friday, as they adjusted their portfolios before the end of the quarter on Wednesday, analysts said.
In London trading on Tuesday, the euro was at 1.2190 dollars against 1.2276 dollars on Monday, at 108.19 yen (109.68), 0.8115 pounds (0.8125) and 1.3284 Swiss francs (1.3344).
The dollar stood at 88.75 yen (89.35) and 1.0897 Swiss francs (1.0869).
The pound was at 1.5034 dollars (1.5106).
On the London Bullion Market, the price of gold fell to 1,235.93 dollars an ounce from 1,261 dollars an ounce on Monday.
