(Reuters) - The euro fell against the dollar and yen on Tuesday, weighed by uncertainty about Spain and Greece and after the International Monetary Fund warned the global economic slowdown is worsening. Spanish bond yields rose after euro zone finance ministers said on Monday that Madrid did not need a bailout yet, adding to uncertainty about when the country will ask for aid, widely seen as inevitable. Concern about Greece also resurfaced after European Central Bank chief Mario Draghi told the European Parliament Committee that Greece has made progress on reforming its economy, but has more work to do. Adding to the negative sentiment, the IMF cut its global growth forecasts for the second time since April and warned U.S. and European policymakers that failure to fix their economic ills would prolong the slump. Attention is also shifting to the latest quarterly U.S. corporate earnings season, which begins with Alcoa Inc. (AA.N) after the market close. Disappointing results could weigh on equity prices and the euro. Stocks and the euro move together 90 percent of the time, Reuters data showed, with the euro rising as stocks gain. "The tone of the market still feels greatly uncertain as we head into earnings season in the United States and indeed the market is now focusing its attention that way as it seeks out bad news wherever it can find it," said Brad Bechtel, managing director at Faros Trading in Stamford, Connecticut. The euro fell 0.5 percent to $1.2911, well below a two-week high of $1.3071 hit on Reuters data on Friday. Traders cited bids below $1.2900 and offers around $1.3000, suggesting a narrow range for the euro. But losses in the euro were limited as Draghi reiterated the ECB's unlimited financial support for troubled euro zone states even though the aid would come with preconditions. In Athens, German Chancellor Angela Merkel said the tough path Greece is on will pay off. Her visit was marred by clashes between police and protesters. Against the yen, the euro lost 0.5 percent to 101.13 yen, well below Friday's two-week high of 102.80 yen, as some Japanese investors exited their long euro/yen positions. "Although important steps have been made both by the ECB and European politicians to save the euro, we think we will get new periods of stress," said ING Investment Management fund manager Jaco Rouw. "Markets are currently in a bit more of a complacent stage, so we think risks are to the downside." "The euro zone economy is clearly one of the weakest in the world, and we think the ECB will have to cut rates further." SWISS FRANC DROPS The euro hit a three-week high against the Swiss franc as traders cited a media report that U.S. custodial banks were set to impose a penalty on Swiss and Danish crown deposits. A spokesman for Bank of New York Mellon confirmed a charge for Danish crown deposits, while a spokesman for State Street said negative rates would apply for both Swiss francs and Danish crown deposits. Both currencies have been safe havens for investors fleeing the euro zone debt crisis. While the Swiss National Bank imposed a floor on the euro/Swiss franc pair at 1.20 francs to curb inflows, Denmark's central bank has cut official rates. Gareth Berry, currency strategist at UBS Singapore, said the franc's weakness was likely to be temporary given rates have been negative in the interbank market for months, and that those wanting to hold Swiss franc deposits for safe haven reasons were unlikely to be deterred by the penalty. The euro rose 0.1 percent to 1.2108 francs, having risen to a high of 1.21435 on EBS trading platform earlier in the day. The dollar gained 0.5 percent to 0.9375 franc. Against the yen, the dollar was little changed at 78.31 yen, but still below a two-week high of 78.87 set on Friday.

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