* Aussie dollar hit by cenbank comments, iron ore slide
* Dollar/yen continues decline
* ECB easing expectations, election jitters hurt euro
(Recasts, updates prices, quotes, changes byline, dateline;
By Gertrude Chavez-Dreyfuss
NEW YORK, May 20 The dollar fell for a fifth
straight session against the yen on Tuesday, undermined by a
persistent fall in U.S. Treasury yields which reflects
uncertainty about global economic growth prospects.
The Australian dollar was the biggest mover of the day,
falling to a two-week low against the greenback on the back of a
slide in prices of iron ore, the country's biggest export
But gains in the U.S. dollar versus the Australian currency
failed to give the greenback a lift against the yen, which has
been on a five-day winning streak as U.S. Treasury yields have
softened in four of the last six sessions.
Benchmark U.S. 10-year Treasury yields fell to
2.53 percent on Tuesday from 2.55 percent late Monday.
"The strong correlation between dollar/yen and Treasury
yields continue to be the main driver," said Joe Manimbo, senior
market analyst, at Western Union Business Solutions in
"Part of that is due to renewed concerns about the health of
the global economy and also Wall Street is off to a slow start."
Despite signs of a spring economic rebound in the United
States, several Federal Reserve speakers have voiced concern
about weakness in the housing sector.
Investors have also expressed worries about China's growth
In mid-morning trading, the dollar fell 0.3 percent to
101.26. The pair traded below its 200-day moving average,
a key technical gauge, for a second straight day.
The Australian dollar, on the other hand, fell 0.8 percent
to US$0.9258, after earlier dropping to US$0.9251, its
lowest since May 5.
The Aussie has recovered solidly from lows reached in late
January but worries over the pace of growth in China continue to
weigh broadly on its outlook and Reserve Bank deputy governor
Guy Debelle said potentially slower capital inflows to Australia
pointed to more weakness.
The euro slipped 0.1 percent against the dollar at
Europe's common currency could face more pressure ahead of
potentially destabilizing European Parliament elections later
this week, where votes for anti-austerity, eurosceptic parties
look set to increase.
Yields on Italian and Spanish government bonds rose on
Monday, as investors, concerned that a rise in eurosceptic
support could thwart reform efforts, took profits on recent
price gains. Yields though were slightly lower on Tuesday.
In addition, the euro has been pressured of late by
expectations of imminent easing from the European Central Bank.
"What we're seeing is that we have seen the euro weaken and
the dollar strengthen on the view that the ECB is sort of
pinning itself into a corner and set to pursue aggressive policy
action," said Mark McCormick, currency strategist at Credit
Agricole in New York.
(Additional reporting by Patrick Graham in London Editing by W