Forexpros - The U.S. dollar was broadly lower against its major counterparts on Tuesday, as political events in Greece were overshadowed by surging borrowing costs in Spain and downbeat euro zone data, while investors eyed ongoing talks at the G-20 summit in Mexico. During European morning trade, the dollar was lower against the euro, with EUR/USD rising 0.22% to hit 1.2603. The euro found support amid hopes that Greece's New Democracy party will form a coalition government with the socialist Pasok party, which would allow Athens to resume negotiations with its creditors on its international bailout deal. But gains were limited as the yield on Spanish 10-year bonds remained above the critical 7% level on Tuesday, amid concerns that a EUR100 billion bailout agreed earlier this month may not be enough to overhaul the country’s ailing banking system. The 7% threshold is widely considered unsustainable in the long run and is the level at which Greece, Ireland and Portugal were forced to seek international bailouts. Also Tuesday, Spain’s Treasury sold EUR2.4 billion worth of 12-month government bonds at an average yield of 5.07% earlier in the day, up sharply from 2.98% at a similar auction last month. Spain also sold EUR64 million of 18-month debt at an average yield of 5.10%, up from 3.30% at a similar auction last month. The bid-to-cover ratio stood at 4.40, compared to 3.23 at an auction in May. Meanwhile, data showed that the ZEW index of economic sentiment in Germany tumbled to minus 16.9 in June from 10.8 the previous month, while the index for economic sentiment in the euro zone declined to minus 20.1 from a reading of minus 2.4 in May. The greenback was higher against the pound, with GBP/USD falling 0.14% to hit 1.5646. Sterling came under pressure after the U.K. Office for National Statistics said that consumer price inflation fell to 2.8% year-over-year in May from 3.0% the previous month, the lowest level in two-and-a-half years. The data fuelled speculation over the possibility of more quantitative easing from the Bank of England, as until now inflation has been easing more slowly than the bank had hoped. Elsewhere, the greenback was lower against the yen and the Swiss franc, with USD/JPY retreating 0.26% to hit 78.91 and USD/CHF declining 0.21% to hit 0.9528. In addition, the greenback was mixed against its Canadian, Australian and New Zealand counterparts, with USD/CAD edging down 0.13% to hit 1.0229, AUD/USD adding 0.16% to hit 1.0143 and NZD/USD rising 0.26% to hit 0.7939. Earlier in the day, the minutes of the Reserve bank of Australia’s June policy meeting showed that talks were dominated by the slower world economy and the debt crisis in the euro zone. The bank also indicated that further interest rate decisions will depend on developments in the single currency bloc. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.18%, to trade at 82.09. Later in the day, the U.S. was to publish official data on building permits and housing starts. Elsewhere, leaders from the Group of 20 nations were to hold a second day of talks in Los Cabos, Mexico.

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