* Euro falls to 10-month low against dollar
* Fitch Ratings cuts Portugal's sovereign rating
* Swiss franc climbs to record high against the euro
* SNB's Jordan: Cenbank will counter excessive franc rise (Recasts, updates prices, adds quote)
NEW YORK, March 24 (Reuters) - The dollar rallied broadly on Wednesday, pushing the euro to a 10-month low after a rating downgrade on Portugal added to worries about debt levels and growth in the euro zone's smaller countries.
Fitch Ratings lowered Portugal's sovereign credit rating to AA-minus from AA, with a negative outlook, which coupled with concerns about debt-stricken Greece a day ahead of an EU summit had investors again weighing the sustainability of the euro zone. For Fitch details, see [ID:nWLB0770]
The last UK budget before an imminent general election did little to temper concerns over Britain's mounting deficit and added to the dollar's allure. [ID:nLDE62N1QJ] and [ID:nLDE62N2BA].
In the United States, economic reports on new orders for long-lasting goods and housing data were mixed, although analysts said the lackluster figures would not prevent investors from buying dollars. [ID:nN2396707] and [ID:nN2396501]
"Downgrades of sovereign debt ratings are a very big deal, but in an environment where investors are already weary of holding let alone buying euros, Fitch's decision to lower Portugal's rating added salt to the wound." said Kathy Lien, director of FX strategy at GFT in New York, in a note to clients.
In late afternoon trading in New York, the euro was down 1.3 percent at $1.3324 <EUR=>. It was the biggest one-day move since Jan. 20, at that price. The session low of $1.3321 was the lowest since early May 2009, according to Reuters data.
Against the yen, the dollar was 1.9 percent higher at 92.15 yen <JPY=> after touching a session high of 92.23 yen.
Michael Woolfolk, the senior currency strategist at BNY Mellon in New York, said the U.S. data was taking a back seat to general, speculative buying of the U.S. dollar after euro-dollar trades had a big technical breakdown overnight.
The downgrade of Portugal was a good excuse to keep selling euros, Woolfolk said.
"This may be short-lived, but I think we could get to 1.30 in euro-dollar by the end of the week," he said. "A move to 1.25 would probably require a more negative fundamental story on the euro zone and Greece in particular, but such a move can't be discounted completely."
The market will keep a close eye on the European Union summit on Thursday and Friday after Germany signaled for the first time that it may accept European financial aid for Greece as a last resort.
But Germany pegged its support to several conditions, including the need for the International Monetary Fund to make a "substantial contribution." [ID:nLDE62M130]
"While the newsflow on the situation will ebb and flow, the overall conclusion is this: at no other time since the advent of the euro has the possibility for a break-up been this high," said Andrew Busch, global FX strategist at BMO Capital Markets in Chicago, in a note to clients.
"It means risk-averse selling will continue until the European Union and IMF can stabilize the debt situation and shift the narrative to a positive tone," Busch said.
Investors flocked to the perceived safety of the U.S. dollar, pushing the greenback to its highest level since May 2009 against a basket of currencies. The dollar index, a calculated measure that tracks the performance of the greenback versus six other major currencies, was up 1.2 percent at 81.907 <.DXY>, also the highest since May.
The dollar reacted positively to a poorly received $42 billion U.S. auction of five-year notes, which stoked anxiety over investors' appetite for U.S. government securities as the U.S. Treasury Department sought cash to fund its massive deficit.
"It was an opportunity to get short euros at a better opportunity," said Jacob Oubina, senior currency strategist at Forex.com in Bedminster, New Jersey. "The path of least resistance for the common currency is lower."
The greenback hit a two-week peak against the Swiss franc at 1.0733 <CHF=>, according to Reuters data before paring gains to trade at 1.0729 francs, still up 1.5 percent.
The euro traded up 0.2 percent against the Swiss franc at 1.4297 francs <EURCHF=> after hitting a record low at 1.4233 in early trade, according to Reuters data. At the peak the euro changed hands at 1.4308 francs.
The Swiss franc came under pressure, giving the euro a boost, in late New York trade after Swiss National Bank Vice Chairman Thomas Jordan said the central bank would counter any excessive franc rise decisively and said the bank has the means to do so. [ID:nWEB7171] (Reporting by Nick Olivari and Vivianne Rodrigues; Additional reporting by Steven C. Johnson in New York and Tamawa Desai in London; Editing by Leslie Adler)