* Euro nears one-month low vs dollar, ECB seen cutting rates
* Euro also hurt by S&P ratings warning on Spain
* Falling stocks supports yen as safe haven
By Satomi Noguchi
TOKYO, Jan 13 (Reuters) - The euro dropped against the dollar on Tuesday, under pressure near a one-month low hit the previous day as expectations mounted the European Central Bank will cut interest rates this week.
The euro also looked fragile against the yen near a one-month trough touched the previous day as a potential downgrade of Spain's top "AAA" rating by Standard and Poor's heightened worries about the euro zone's economic outlook.
"The driver of the market right now is the euro," said a trader at a Japanese bank. "A falling U.S. stock market is a worry for the dollar, but the market, in the near term, is likely to focus on the deteriorating economic outlook in the euro zone," the trader said.
Markets expect the ECB to cut key interest rates by 50 basis points to 2 percent on Thursday, a Reuters poll showed. Money market futures on Monday showed investors see a 75 basis point cut, and some were bracing for a full percentage point move.
The euro dropped 0.4 percent from late New York trade to $1.3308, erasing an earlier recovery and falling towards a one-month low of $1.3289 struck the previous day on trading platform EBS.
Against the yen, the euro bounced around 119.20 yen, within reach of a one-month low of 118.66 yen hit on Monday on EBS.
The dollar edged up 0.3 percent against the yen to 89.45 yen, but stayed near a three-week low of 88.89 yen hit the previous day and not far off December's 13-1/2-year trough just above 87 yen.
Traders said falling global stock markets revived investor risk aversion and drops in Asian shares could further prompt investors to move away from higher-yielding currencies like the Australian dollar to the perceived low-risk of the yen.
Tokyo shares fell more than 4 percent with Sony Corp tumbling on a report of operating loss and after concerns about massive credit losses at Citigroup knocked U.S. shares down the previous day. (Editing by Rodney Joyce)