(Adds details, fresh quotes after German survey)
* Euro falls after German ZEW sentiment survey
* Dollar main beneficiary of euro's weakness
* New Zealand dollar hits 2-month lows
By Anirban Nag
LONDON, Aug 12 The euro fell towards 9-month
lows against the dollar on Tuesday, hurt by a plunge in German
analyst and investor morale in August which added to signs of a
slowdown in the euro zone recovery.
The German ZEW survey showed both the current situation
index and the expectations index deteriorated sharply, as
Europe's largest economy was hit by uncertainty caused by the
Economic sentiment fell for an eighth consecutive month to
8.6 in August, its lowest since December 2012. The reading was
well below forecasts.
The West has imposed tough sanctions on Moscow, one of
Germany's biggest trading partners, over Russia's purported role
in Ukraine. Russia, has responded with sanctions which analysts
say will hurt the euro zone.
"The sentiment survey is consistent with some of the loss in
momentum we have seen for the German economy and does not bode
well for the euro zone," said Jeremy Stretch, head of currency
strategy at CIBC World Markets.
"If the euro drops past the $1.3330-35 support area, then
bears could target $1.3295 in the coming days."
The euro fell to $1.3339 after the survey was
released, down 0.3 percent on the day, and not far from a
nine-month low of $1.3333 struck on Aug. 6. It was also lower
against the yen at 136.50 yen, eyeing a recent trough
of 135.73 yen.
The euro's losses saw the dollar edge up. The index rose 0.2
percent to 81.648 with the dollar making gains against
the yen and the Swiss franc.
The safe-haven yen stayed off highs notched up late last
week when concerns about the situation in the Middle East and
the conflict between Ukraine and Russia were more acute. The
dollar bought 102.30 yen, adding about 0.15 percent and
pulling away from Friday's two-week low of 101.51 yen.
Apart from the euro, a big mover was the New Zealand dollar
which fell to a two-month low against its U.S. counterpart.
It dropped to $0.8407, and its lowest since June 4
when it fell to $0.8401. It was last trading at $0.8425, down
0.4 percent on the day.
That was a long way off a near three-year high of $0.8839
hit last month, with the currency dogged by expectations of a
slowdown in the pace of New Zealand interest rate rises and an
ongoing tumble in global dairy prices.
Fresh evidence that the housing market there was cooling was
also adding to selling pressure, traders said.
"The New Zealand dollar is now reaching the key $0.84 level.
A break below this level would confirm a technically bearish
"double-top" formation suggesting a move below $0.80," Morgan
Stanley said in a note.
(Additional reporting by Lisa Twaronite in TOKYO; Editing by
Louise Ireland and Andrew Heavens)