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* Euro down 0.7 pct vs dollar, slips 0.8 pct vs yen
* Tepid demand at Italian debt auction weighs on single currency
* Euro also struggles on Greek bailout spat
By Neal Armstrong
LONDON, Aug 30 (Reuters) - The euro fell broadly on Tuesday as weaker than expected demand at an Italian debt auction added to worries over the euro zone periphery, with sentiment already hit by bickering between euro zone countries about the terms of a Greek bailout deal.
Traders brushed off gains in European shares, which largely tracked a rise in the U.S. the previous day. U.S. equity futures were trading in negative territory on Tuesday. SPc1
Market participants, including London traders returning from a holiday on Monday, focused instead on divisions among euro zone countries on how to solve the bloc's debt problems and disappointing results at an auction of 7 and 10-year bonds.
The euro fell to a session low of $1.4380 and was last down 0.7 percent on the day at $1.4400, retreating from a two-month high of $1.4550 hit on Monday. Traders said a series of stop-losses were hit on the way down, with more lurking at $1.4370/60, in line with the euro's 100-day moving average.
"The Italian auction was relatively poor," said Adam Cole, global head of fx strategy at RBC Capital markets.
"The market is sensitive as to where the next pressure point in the euro zone periphery is going to be and right now that's looking like Italy," he added.
Traders said the European Central Bank bought significant amounts of 10-year Italian debt in a renewed attempt to support the market.
The euro was down close to 1 percent for the day against the yen at 110.60 after traders said stop-losses were hit through 111.00 and 110.80.
Peripheral debt worries continued to haunt the euro zone with Reuters on Monday reporting detailed proposals put forward by Finland regarding its demand for collateral in return for providing more aid to Greece.
Helsinki's demands for collateral have sparked requests from countries including Austria, the Netherlands, Slovenia and Slovakia for similar treatment, and could jeopardise euro zone attempts to save Athens from default.
"We're getting a bit of noise about what the euro zone is up to, what it's not up to and what it should be up to," said Geoffrey Yu, currency strategist at UBS.
"It's getting so convoluted, all the demands from smaller states like Finland, Austria, Slovakia ... If this is going to be the case for a while to come, people are going to be concerned that the crisis is going to drag on."
The dollar rose 0.5 percent against a currency basket, helped by investors seeking a safe haven for their cash, although many in the market see a growing likelihood of another bout of quantitative easing (QE) by the U.S. central bank, which would weaken the dollar.
QE would flood the financial system with more dollars and probably boost stocks, higher yielding currencies and the euro.
Fed chief Ben Bernanke acknowledged slower-than-hoped-for growth in the U.S. economy in a speech late last week, but did not make clear the central bank would step in, saying only it would hold a longer policy meeting this month to consider its options.
Data on Monday showing a rise in U.S. consumer spending suggested the economy is not falling back into recession, although the risk remains that the economy will continue to struggle but not enough to push the Fed into action.
The market was also awaiting minutes, due later in the day, from the Federal Reserve's policy meeting earlier this month. Any suggestion that more stimulus may be needed to boost the fragile U.S. recovery is expected to spur selling in the dollar.
The dollar slipped 0.1 percent to 76.74 yen, but stayed above an all-time low around 75.94 set earlier in the month, as market players remained wary of possible yen-selling intervention by Japanese authorities.
Finance Minister Yoshihiko Noda, who oversaw Japan's massive intervention earlier this month, was voted in as prime minister on Tuesday, suggesting no change in Japan's currency policy. (Additional reporting by Naomi Tajitsu; Editing by Susan Fenton)