The euro extended its losses on Tuesday on renewed concerns about high sovereign debt in the euro zone, providing further reprieve for the dollar and prompting some profit-taking in stocks. Gold added to a record breaking run, hitting a new high above USD 1,400 an ounce as investors sought safe havens in the face of a number of uncertainties, including the euro-area debt concerns and this week's G20 leaders' summit. The euro has dropped 3% against the dollar from a 9 and a half month high set last week and against the yen has slipped to a one-week low, although some forecast limited downside. "We've probably seen a short-term top in the euro," said Grant Turley, strategist at ANZ in Sydney, adding it was a mild corrective move and unlikely to worsen unless concerns over the euro zone's sovereign debt intensify. Ireland is the latest country to rattle the single currency, with Irish borrowing costs extending a month-long climb on worries about a political impasse in Dublin ahead of a budget vote. The yield on Irish 10-year bonds hit 8% for the first time on Monday. Adding to the market's cautious tone, top officials at the US Federal Reserve offered differing assessments of the central bank's USD 600 billion bond-buying programme announced last week. One argued it was an effective way to offset deflation risks and another warned it might need to be curbed to head-off inflationary pressures. Another uncertainty for markets is a G20 leaders' meeting this week in South Korea, where currency tensions loom large. "The market is also going to be wary ahead of G20 but I think they'll struggle to come up with any substantive plan," ANZ's Turley said. Investors in stock markets, cautious after recent rises, chose to bank gains. The benchmark Nikkei average fell 0.7 percent in early trade after the index had risen to a three-month high the previous day. Shares in Japanese precision machinery makers, which depend on Europe for many of their sales, were among the biggest losers as investors worried a strong yen would crimp earnings. "The yen's strength against the euro is inducing some selling pressure," said Hiroaki Kuramochi, chief equity marketing officer at Tokai Tokyo Securities. The MSCI index of Asia Pacific shares outside Japan eased. Since September, when investors began to price in that the Fed's efforts to print more cash would lead to more capital inflows into fast-growing Asia, the index has outperformed the MSCI world benchmark, with gains of 21 percent versus 18 percent. The G20 summit has been pitched as a chance for leaders of the world's advanced and developing economies to stop a currency row from spiralling into trade-damaging protectionism, but there is little sign of consensus. That is leading investors to seek out safe haven investments. Gold hit a record high of USD 1,412.75 and palladium rose to a nine-year peak. Spot silver hit a fresh 30-year high for a fourth straight session, edging within cents of USD 28 per ounce, though the firmer dollar weighed on broader commodity markets. The dollar pulled US crude futures down 38 cents to USD 86.68 per barrel following six straight sessions of rises.

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