Euro yields since more than one month against the dollar, pound falls

The euro eased from a peak a month against the dollar on Tuesday, the yuan at a low a day after China's pledge to loosen its currency risk encouraged demand, while the pound fell to a session low following the announcement of its new fiscal budget.

The rally Monday at the sight of the euro and the currencies of high risk, including the Australian dollar was sold as investors recognized that a more flexible yuan would not lead to a sharp appreciation of Chinese currency.

"A moderate appreciation of the yuan will not change the situation of China's current account and does not mean the end of global imbalances," said Ulrich Leuchtmann, currency strategist at Commerzbank in Frankfurt.

"Therefore, no need for a significant impact on the euro / dollar and dollar / yen. There should be a reassessment to have a big impact on," he said.

The midpoint of the yuan was set at 6.7980 per dollar on Tuesday, the highest since its revaluation in July 2005, but the Chinese currency Monday's gains erased by large purchases of dollars from state banks.

At 1134 GMT, the euro was down 0.2 percent at $ 1.2271, after falling to 1.2259. The single currency back from its peak of $ 1.2490 Monday, its highest level since May 24 after failing to pass the $ 1.25 level.

Dealers said the euro would face more losses, but technical analysts argued that the level of short-term support is at $ 1.2253.

The euro reacted little to the index of German Ifo business climate, which rose slightly to its maximum of two years in June.

"The positive surprise Ifo index did not change the negative tone of the market. The fact that the expectations component was bassist did not help to support the single currency," said analysts at Credit Agricole CIB in a note.

The euro was down 0.6 percent against the Japanese currency to 111.29 yen.

The Swiss franc extended gains to a record high against the euro, after the Swiss central bank vice president argued that the institution did not have to intervene in the market for now.

The euro slipped to a low of 1.3618 francs, according to Reuters data.

The pound fell to a session low of $ 1.4692, after the British Finance Minister, George Osborne, announced the first budget the new government, expected to be the tightest in decades because of the promise of reduce the fiscal deficit.

The dollar index was up 0.2 percent to 86.129, rebounding from a one-month low on Monday. Analysts said this suggested further progress in the short term.

But the dollar lost almost 0.3 percent to 90.55 yen.