* Euro hit hard as officials struggle to resolve Greek debt crisis
* Comments from ECB's Wellink spark fresh round of selling
* Dollar up across board, index at 3-week high
* Swiss franc off peak, market looks to SNB comments
* Yen wrestles with important Ichimoku cloud bottom
By Hideyuki Sano
TOKYO, June 16 (Reuters) - The euro tumbled to a three-week low on Thursday, with a break through key support pointing to the risk of further losses, as worries grew that Greece's debt crisis may be spiralling out of control as a new bailout scheme to keep the country from defaulting remained elusive, while protests against austerity turned violent in Athens.
Comments from European Central Bank policy maker Nout Wellink, reported in a Dutch newspaper, that the European bailout fund should be doubled helped to trigger a wave of stop-loss selling orders around $1.4150 in a market already frayed by a rise in yields on Greek bonds as well as equivalent Portuguese and Irish spreads.
"Investors are getting worried that policymakers can't agree on measures for Greece. Even though the Greek economy accounts for only a small part of the euro zone economy, it could affect the whole European financial system if it is considered to be in default," said Kimihiko Tomita, forex manager at State Street.
Concerns about possible strains in the banking sector are raising speculation that European banks could face difficulty in dollar funding, with tension already palpable in the currency swap market.
The one-year euro/dollar currency basis swap spread, the
cost of swapping euro into dollar for a year, widened to 34
basis points
Though it was still smaller than a peak of around 55 basis points after the first Greek debt crisis last year, and 120 basis points after the collapse of Lehman Brothers in 2008, traders said market players are increasingly on edge about potential fallout from the debt crisis, which seemed close to a solution, even if a temporary one, just a few weeks ago.
"It seems everyone is a bit scared, as no one knows who would finance it (if the euro aid fund has to be doubled) ... Speculators, hedge funds and all other investors are offloading now," said a trader at a Japanese bank.
The euro fell to as low as $1.4093
"Based on our monitoring of institutional investors, they are still very long in the euro. So there's a chance that more euro unwinding could be kicking in," Tomita added.
As the euro sags, the dollar index <.DXY> rose to a three-week high of 75.886, extending gains on top of a 1.7 percent jump on Wednesday -- its biggest one-day percentage gain since August 2010.
The dollar looked to be benefiting from risk-aversion,
making gains even as U.S. Treasury yields fell to 2.94 percent
The dollar also held firm against safe-haven currencies
such as the Swiss franc and yen. It kept Wednesday's hefty
gains and traded at 0.8535 francs
For the Swiss franc, the focus is on the Swiss National Bank, which is expected to keep rates on hold at 0.25 percent on Thursday. Traders are looking to comments from the bank on the recent strength of the franc.
Analysts expect the bank to raise rates by 25 basis points in September and again in December, but the SNB has been wary of raising its target for 3-month Swiss franc LIBOR, for fear of pushing the franc up still further against the euro and the dollar. [ID:nL9E7F6040]
Against the yen, the greenback flirted with a two-week high of 81.06 yen hit on Wednesday, with many players looking to whether it can stay above 80.89 yen, the base of the Ichimoku cloud.
Commodity currencies like the Australian dollar also lost
ground to the U.S. dollar, with even hawkish comments from the
Reserve Bank of Australia on Wednesday providing little support
to the Aussie
It fell 0.4 percent to a three-week low of $1.0517. (Additional reporting by Eric Burroughs, Chikafumi Hodo and Antoni Slodkowski in Tokyo and Ian Chua in Sydney; Editing by Joseph Radford)