* Euro hits 5-month low vs dlr; breaks through 200-day MA
* Greek woes hurt euro; US Senate election helps dollar
* China curbs on lending weighs on commodity currencies
(Recasts throughout. Adds comment, details)
By Vivianne Rodrigues
NEW YORK, Jan 20 (Reuters) - The euro hit five-month lows against the dollar on Wednesday as concerns over Greek debt pushed the single currency below a key support level and triggered widespread selling.
Meanwhile, the dollar hit a one-month high versus a currency basket helped by expectations the election in Massachusetts of a Republican to a U.S. Senate seat might see the government rein in spending and cut the fiscal deficit. For details, see [ID:nN18159712]
Reports that some Chinese banks have been instructed to curb lending weighed on commodity currencies and gave further support to the greenback.
"Concerns about Greece and the implications for the euro and the Euro zone have been the catalyst for the dollar strength," said John McCarthy, director of foreign exchange at ING Capital Markets in New York.
Worries about cash-strapped Greece's ability to finance its mounting budget deficit have increased in the past couple of months, hurting the euro.
The single currency broke well below its 200-day moving average versus the dollar around $1.4295, which had been considered a key support level.
Selling accelerated after stop-loss orders were triggered under that level, traders said.
The last time the euro broke below that moving average was
in August 2008, when it tumbled more than 10 cents within a
month. The single currency was last 1.1 percent lower at
$1.4135
Broad dollar gains helped push its value against a currency basket <.DXY> to 78.214, its strongest in about a month, according to Reuters data.
Some analysts also said Tuesday's Massachusetts election may pave the way for legislative compromises and ultimately spending cuts.
Paul Mackel, director of currency strategy at HSBC in London, said this view contrasted with the euro zone, where Greece's woes have also raised concerns about the fiscal health of other members of the 16-country bloc.
"Euro/dollar will stay under selling pressure at least in the near term... If the market is considering whether the U.S. fiscal outlook is looking better, while it's still looking ropy in the euro zone, that's giving conviction to be short on the euro," he added.
The euro fell as low as 86.85 pence against sterling
CHINA WEIGHS
Commodity-linked currencies of countries, which depend heavily on the exports of some raw materials for income, suffered after Chinese media and bank sources said banking authorities had instructed major banks to curb lending for the rest of January. [ID:nTOE60J09N]
The move may slow China's economic recovery and cut its demand for commodities, analysts said.
The New Zealand dollar tumbled 2.5 percent versus the U.S.
dollar to a three-week low $0.7201
In the U.S., reports showed U.S. housing starts fell unexpectedly in December, while producer prices rose last month. [ID:nN20131705] [ID:nN19225528]
"The data should be dollar-constructive because of the high risk aversion in the market given the China news," said Boris Schlossberg, director of FX research at GFT in New York. "
Weaker-than-forecast Canadian inflation data knocked the
Canadian dollar to a two-week low of C$1.0449 per U.S. dollar
(Additional reporting by Michael O'Boyle and Gertrude Chavez-Dreyfuss in New York and Naomi Tajitsu and Jessica Mortimer in London; editing by W Simon )