* Euro hits record low vs Aussie dollar
* German finance minister's comments weigh on euro
* Yields rise at Spanish bond sale
* German vote due later on Berlin's contribution to Spain
aid
By Gertrude Chavez-Dreyfuss
NEW YORK, July 19 (Reuters) - The euro weakened across the
board on Thursday, hitting another record low against the
Australian dollar, as Germany warned Spain's financial troubles
are far from over and its government should be ultimately
responsible for European aid to its banks.
Ahead of a German parliamentary vote on aid for Spanish
banks, Schaeuble said just the mere perception of insolvency
risk in Spain could cause contagion in the euro zone.
The euro hit session lows at $1.2229 in the wake of
Schaeuble's comments and was last at $1.2242, down 0.3 percent
on the day.
Analysts expect the euro to retest a two-year low of $1.2162
hit last week because investors, discouraged by a lack of
progress being made towards solving the euro zone debt crisis,
continue to shun the currency in favor of safer havens.
"There's a lot of back and forth like a roller-coaster on
who's liable for Spanish aid," said Boris Schlossberg, managing
director at BK Asset Management in New York.
"Basically, the Germans are being strict that the liability
stays with the sovereign and all that does is exacerbate the
debt burden of the sovereign and the market doesn't like that."
Spanish 10-year yields climbed back above 7 percent after
Schaueble's comments, from about 6.9 percent just
before. Spain earlier sold 3 billion euros in debt at a higher
cost than previous auctions.
The euro also fell 0.6 percent against the yen
to 96.20 yen and hit a record low of A$1.1744 against the
higher-yielding Australian dollar, as well as hitting
a 3-1/2-year low against the UK pound.
"The theme is one of carry plays because there is so much
excess money out there that people are looking to get any sort
of return on their investment, whether in bonds or in equities,"
said Ankita Dudani, currency strategist at RBS.
