* Euro falls to $1.4028, lowest since late July
* Dollar buying momentum gains, .DXY hits 4 1/2-mth high
* Spreads widen on Greek, Spanish and Portuguese bonds
By Naomi Tajitsu
LONDON, Jan 21 (Reuters) - The euro hit its weakest against the dollar in nearly six months on Thursday, stung by concerns over Greece and other peripheral euro zone countries, while a recent breach of key technical levels added to selling momentum.
Ongoing weakness in the single European currency prompted a broad rise in the dollar, which extended this week's winning streak and hit a 4-1/2-month high against a currency basket.
The Australian dollar slipped as robust Chinese growth and higher inflation data raised speculation of further monetary tightening, which could hurt commodity-linked currencies.
Analysts said the U.S. currency benefited from a slide in global share prices and the dollar index's vault above its 200-day moving average on Thursday.
The euro dropped under its 200-day moving average against the dollar on Wednesday for the first time since May 2009. Analysts said this suggested it may be prone to more weakness. "We see positive momentum in the dollar continuing due to risk appetite and problems related to the euro zone," said Kasper Kirkegaard, currency strategist at Danske in Copenhagen.
"That momentum has increased after technical levels were breached, which is supporting the dollar."
The euro fell 0.5 percent on the day to $1.4028 according to Reuters data, its lowest since late July. By 1126 GMT, it was at $1.4040. Option barriers were seen at $1.4000, traders said.
The dollar index <.DXY> rose to 78.814, its highest since early September, and pushed above its 200-day moving average at 78.515 for the first time since May last year.
These gains helped to push the dollar up broadly, taking it to its highest in roughly a month against the Swiss franc and the Canadian and New Zealand currencies.
CHINA DATA
Worries over the fiscal health of some heavily-indebted euro zone states prompted investors to sell government bonds of Greece, Spain and Portugal in favour of benchmark German paper. [ID:nLDE60K0JU]
For a graphic on the euro and Greek bond spreads, click on
http://graphics.thomsonreuters.com/0110/EZ_EURGR0110.gif
The euro was also under pressure after a flash reading of the composite Purchasing Managers' Index for January fell to 53.6 from 54.2 the previous month and below forecasts of 54.5, indicating slower expansion. [ID:nLAG006052]
"January's fall in the euro zone composite PMI suggests that the recovery might be losing momentum," said Jennifer McKeown, economist at Capital Economics.
China's annual gross domestic product expanded 10.7 percent in the fourth quarter, while third quarter growth was revised up to 9.1 percent. Growth for the year was 8.7 percent, surpassing Beijing's 8.0 percent target. [ID:nTOE60K011]
That raised speculation of further tightening after recent steps by China's central bank to rein in liquidity. On Thursday, it guided rates on 3-month bills higher.
China is Australia's top trading partner, making the Aussie sensitive to growth expectations for China.
The Australian dollar slipped 0.1 percent to $0.9080 after
Broad yen weakness pushed the dollar 0.6 percent higher to
to 91.85 yen
Traders will watch earning results [RESF/US] from Goldman
Sachs