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NEW YORK (Reuters) - The dollar sold off acrossthe board Tuesday, touching a 15-year low below 83 yen as abreak of technical support levels in several pairs sparked astampede out of the U.S. currency.
With concerns growing about intervention by Japaneseauthorities to weaken the yen, the Japanese currency inparticular got a boost after Japan's prime minister won aleadership vote. Prime Minister Naoto Kan won an unexpectedlydecisive victory over party heavyweight Ichiro Ozawa, who hadbeen more strident in his calls to intervene to weaken the yen.
A rally by the euro to a one-month peak against the dollaralso grabbed traders' attention after it pierced a technicallevel amid market talk about possible further quantitativeeasing in a bid to stimulate the U.S. economy.
"It seems people are vacating dollar positions today andthat money is shifting into other safe-haven assets for thetime being -- the yen, the Swiss franc, gold and U.S.Treasuries," said Greg Salvaggio, vice president of trading atTempus Consulting in Washington.
Salvaggio said he would be selling euros anywhere near$1.30 and buying dollar-yen below 83 on the belief the U.S.economy is beginning to turn the corner.
The euro's advance began when it pared early losses afterU.S. retail sales rose more than expected in August, notchingthe largest gain in five months.
Once the single currency broke above the $1.2920 to 30area, a level that had held since August, it kept going to a one-month high of $1.3033 . It was last up 1.1 percent at1.3019.
The significant break came in late morning New York tradeon market talk that Goldman Sachs said in a research note thatwhile it suspects the Federal Reserve will ratchet down growthforecasts, the revision is unlikely to be enough to sparkadditional easing. The euro was up 0.2 percent at 108.04 yen.
The Goldman note also pushed the dollar index , anon-traded calculation that measures the dollar's performanceagainst six currencies, below the 200-day simple moving averagefor the second straight day, this time convincingly and ontarget to close below the average for the first time sinceAugust 10, according to Reuters data.
The index is now oversold for the first time since Aug. 6based on the 14-day relative strength index.
Amid broad dollar woes, the Australian dollar surged to itshighest against its U.S. counterpart since mid-2008 afterbreaching an important technical level. It was last at $0.9448,up 1 percent from late Monday. The move accelerated after thecurrency broke above a recent high around $0.9365.
The dollar fell to a 15-year low of 82.92 on electronictrading platform EBS and 82.93 on Reuters. It last traded at82.96, down 0.9 percent on the day .
The yen has gained more than 10 percent against the dollarthis year as recent weak U.S. data and record-low bond yieldsdrove money away from U.S. assets. Japan worries that a strongyen will hurt its export-driven economy.
The Kan victory provided "positive yen news," said JosephTrevisani, chief analyst at FX Solutions in Saddle River, NewJersey. But he added that "83 has no more meaning than thetypical round number in dollar/yen. The level to look at is theall-time low."
That low is at 79.75 yen.
Tempus Consulting's Savalggio suggested Japaneseintervention below 83 yen is a real risk and suggested goingshort yen. Traders also cited "stop-loss" orders around 82.85yen.
If the dollar hits 82 yen in a couple of hours, the risk ofintervention would rise, analysts say.
Dollar/yen three-month composite risk reversal was at -2.15Tuesday from -1.9 Monday, with a bias to dollar puts andyen calls and indicating slightly more bullishness on the yen.
Boris Schlossberg, head of research at GFT Forex, saidtraders would try to push the dollar toward the all-time lowbeneath 80 yen, though he said if U.S. economic data starts toimprove, short dollar positions could be in for a squeeze.
Lingering doubts about the longer-term global outlook keptthe safe-haven Swiss franc in demand. The dollar fell to 0.9934francs , the lowest since late November. (Reporting by Nick Olivari and Steven C. Johnson; Editing byDan Grebler) (Additional reporting by Gertrude Chavez-Dreyfuss and VivianneRodrigues in New York and Tamawa Desai in London)