(Reuters) - The euro was weak near a two-year trough against the dollar and hit a five-week low versus the yen on Tuesday after a meeting of euro zone finance ministers offered no positive surprises, with sentiment edgy as the focus shifted to a German court hearing. Euro zone ministers agreed to grant Spain an extra year, until 2014, to reach its deficit reduction targets in exchange for further budget savings and set the parameters of an aid package for the country's ailing banks. But they made no apparent progress on activating the bloc's rescue funds to intervene in bond markets to bring down spiralling borrowing costs for Spain and Italy. Meanwhile, Germany's constitutional court is scheduled to hear on Tuesday a complaint about the ratification of the euro zone rescue fund and implementation of tough new budget rules. Markets are hoping for a quick verdict but some analysts said a decision could potentially take a few weeks, keeping Europe on tenterhooks and possibly adding to bearish sentiment towards the euro. The court is not known to be pro-Europe and an adverse verdict could hurt integration plans. The euro fell 0.3 percent to $1.2280, edging back in the direction of a two-year low of $1.2225 hit the previous day on trading platform EBS. It also fell to a five-week low of 97.32 yen on the EBS platform. "We have a German court hearing today and while we do not expect them to overturn the legislation, they could give more oversight to the parliament, which will increase the red tape around the euro zone bailout fund," said Melinda Burgess, currency strategist, at RBS. "That will mean more uncertainty and more weakness for the euro. We are comfortable with our short euro position." The euro has taken a hit after the European Central Bank cut interest rates last week, while a renewed rise in Spanish bond yields suggests there has been little let-up in investor concern over Spain's fiscal health or the wider euro zone debt crisis. Spanish 10-year bond yields have risen back above the critical 7 percent level seen as unsustainable in the long-term. With Spanish and Italian bond yields at elevated levels, the euro is expected to remain under pressure despite developments at the Ecofin meeting. Analysts said the political hurdles on how to use the euro zone's rescue fund and prevent further contagion remained very high. "I think we have a long way to go before we reach the stage at which policymakers will be ready to act, particularly as it relates to potential bond purchases in the secondary market," said Todd Elmer, currency strategist for Citi in Singapore. Market expectations for the euro zone finance ministers' meeting had not been high to begin with, but the outcome highlights a seeming lack of urgency on the part of policymakers, Elmer said. CHINESE TRADE DATA The euro's struggles saw the dollar index climb. The index, which measures the dollar's performance against major currencies was up 0.1 percent at 83.219. The dollar was up 0.25 percent against the Swiss franc at 0.9770 francs, not far from a 19-month high of 0.9825 francs. The U.S. currency fell against the yen, to 79.23 yen, but held within a roughly 79.08 yen to 80.10 yen range seen since late June. The Australian dollar slipped versus the greenback after China's trade data disappointed some in the market who had been expecting stronger import numbers. China's imports in June grew at half the expected pace, underscoring concerns that China's economy and domestic demand are cooling quickly, although export growth was slightly better than expected. The Aussie dollar was last down 0.2 percent on the day at $1.0183. China is Australia's single largest export market and the health of the world's second-biggest economy is always a key mover of the commodity currency.

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