FOREX-Euro hits 15-mo high vs dollar; yen, Swiss franc up

* China committed to buying Spanish debt, boosts euro

* Yen, Swiss franc big gainers as well in risk-off market

* Japan nuclear situation deteriorates
(Recasts, adds quote, updates prices, changes dateline;
previous LONDON and byline)

By Gertrude Chavez-Dreyfuss

NEW YORK, April 12 (Reuters) – The euro rose to a fresh
15-month high against the dollar above $1.45 on Tuesday,
boosted by reported buying from China and news the world’s
second largest economy was willing to purchase more Spanish
debt.

The euro’s break above $1.45 was a bullish signal, which
could open a test of $1.4550 and $1.4580. Both levels are said
to be lined with option barriers.

“The euro is being supported by expectations of higher
interest rates and news that China has reiterated its
commitment to buy European debt,” said Camilla Sutton, chief
currency strategist, at Scotia Capital Markets in Toronto.

“That China news helped drive Spanish yields lower and was
positive for the euro.”

For the China news, click on [ID:nB9E7EN01X].

Spanish 10-year yields have fallen to 5.18 percent on
Tuesday from a recent high of 5.55 percent on March 10.

The yen and Swiss franc were the two other big movers of
the day, rising after Japan’s nuclear situation worsened and
Alcoa missed revenue estimates, prompting investors to sell
risky assets funded by the two low-yielding currencies.

Gains in both the yen and Swiss franc, were likely to be
short-lived as demand for so-called carry trades financed by
those two units may pick up again should the situation in Japan
improve.

The yen rose for a fourth straight session, partly
retracing 10 consecutive days of losses versus the U.S. dollar.
The Swiss franc also advanced for a fourth straight day.

The initial sell-off in risk was prompted by Japan’s
Nuclear Safety Agency raising the severity rating of the
Fukushima accident to level 7 — the highest classification and
the same as the world’s worst nuclear disaster at Chernobyl in
1986. [ID:nL3E7FB2TZ].

News that revenues from Alcoa Inc. (AA.N: Quote, Profile, Research), the largest U.S.
aluminum producer, missed Wall Street’s target and leading to a
steep drop in the company’s share price, also dented risk
sentiment.

Both the Japan and Alcoa news led some speculators to book
profits on carry trades, where investments in riskier assets
and higher-yielding currencies such as the Australian dollar
are funded by going short on the low-yielding yen.

In early New York trading, the euro (EUR=EBS: Quote, Profile, Research) reversed
losses to trade 0.5 percent higher on the day at $1.4510, after
earlier hitting a fresh 15-month peak at $1.4518 on electronic
trading platform EBS.

Investors took out option barriers at $1.4500 and stops at
$1.4510-12.

Against the yen, the euro was down 0.1 percent at 122.02,
recovering from a low of 120.16 yen (EURJPY=EBS: Quote, Profile, Research) hit earlier in
the day. The Australian dollar also pared losses against the
yen (AUDJPY=R: Quote, Profile, Research) as did other growth-linked currencies as
investors bought at lower levels.

Short yen positions and key technical indicators in the
euro/yen and Aussie/yen pairs had been indicating the chances
of a temporary pullback after their recent rally. With this
correction, some analysts said, the trend for broad yen
weakness was likely to be on more solid ground.

The U.S. dollar was down 0.7 percent at 84.01 yen (JPY=: Quote, Profile, Research)
paring earlier losses after running into technical support at
its 200-day moving average just below 83.50. Japanese
real-money accounts were dollar/yen buyers, while offers were
reported at 84.50.

Short-term losses in the dollar versus the yen are still
likely, with a close below 84.41-51 yen adding to the
greenback’s bearish bias.

The dollar fell 1.3 percent against the Swiss franc
(CHF=EBS: Quote, Profile, Research) to 0.89490. It earlier dropped to 0.89446, its lowest
in more than three weeks.

The ICE Futures’ dollar index (.DXY : Quote, Profile, Research), which tracks the
greenback against a basket of major currencies, was down 0.5
percent at 74.754, after hitting 74.704, its lowest since
December 2009.
(Editing by Theodore d’Afflisio)

FOREX-Euro hits 15-mo high vs dollar; yen, Swiss franc up