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FOREX-Dollar near 4-mth lows on Moody's U.S. warning, QE hopes
* Dollar index sits just above critical retracement support
* Charts indicate dollar could be oversold
* Euro may gain further if German court oks rescue fund
* Yen near 3-1/2 month high,
By Hideyuki Sano
TOKYO, Sept 12 (Reuters) - The U.S. dollar was stuck near four-month lows against a basket of major currencies on Wednesday after Moody's warned it could cut the credit rating of the United States and on expectations of more stimulus measures from the U.S. Federal Reserve.
The euro was on hold after having rallied to four-month high against the dollar on Tuesday though it could gain further if Germany's Constitutional Court allows Germany to participate in the euro zone's bailout fund. The ruling is due at 0800 GMT.
The dollar index fell to 79.794 on Tuesday, extending its fall after Moody's said the United States could lose its triple-A debt rating if next year's government budget talks do not produce policies that gradually cut the country's debt. The index last stood at 79.89.
"Although everyone has been aware of the potential risks in the U.S. fiscal situation, a warning at this time was a bit of surprise and triggered fresh selling," said Teppei Ino, currency analyst at the Bank of Tokyo-Mitsubishi UFJ.
The dollar index is testing an important support at 79.75 which is the 38.2 percent retracement of the rise from its 2011 low to two-year high hit in July, and a break of that support would strengthen the case that its long-term uptrend since last year is over.
But the index might stage a rebound given some technical signals that it is oversold. Its 14-day relative strength index has fallen below 30, which suggests there is considerable chance of a corrective rebound in the near future.
Although chances are slim that Germany's top court will signal that Germany must change its constitution and hold a referendum before it can take part in any further integration of the European Union, such a ruling would drive the dollar higher.
Expectations that the Fed may embark on further stimulus measures at its policy meeting ending on Thursday are likely to keep the dollar under pressure for now.
The euro stood at $1.2851, near a four-month high of $1.2872 hit on Tuesday.
Another potential source of disruption for the euro is a general election in the Netherlands on Thursday, though latest polls indicate radical anti-euro parties have lost the momentum they had just a month ago.
The Japanese yen held near 3-1/2 month high against a broadly weak U.S. dollar, trading at 77.78 yen per dollar , near Tuesday's high of 77.70 per dollar.
If the dollar falls below its June 1 low of 77.652, that could open the way for a test of this year's low around 76 yen, though wariness about Japan's yen intervention would also grow as well, market players said.
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