* Euro falls briefly falls below $1.19
* Above-forecast German factory orders help euro
* Dollar seen as safe haven when risk aversion rises
* Euro zone debt, Hungary concerns linger
(Adds details, updates prices)
By Steven C. Johnson and Vivianne Rodrigues
NEW YORK, June 7 (Reuters) - The euro fell below $1.19 on Monday for the first time in more than four years, but recovered some losses as strong German manufacturing data prompted investors to book profits after the currency's recent slide.
European corporate demand helped the euro rebound after it touched $1.1876 EUR=EBS -- its weakest level since March 2006.
But it remained well below $1.20, a key psychological level pierced on Friday after Hungary's warning about its deficit stoked investor worries of the severe debt problems plaguing some European countries.
"After Hungary's warning and weaker-than-expected U.S. jobs data on Friday, selling got a bit overdone," said Amelia Bourdeau, senior strategist at UBS in Stamford, Connecticut.
"But what investors are doing is waiting for short squeezes like this that push the euro up and then preparing to re-enter short positions," she added. "Things were overdone last week but there isn't much on the horizon that's euro-positive." Data on Friday showed speculators trimmed net short positions on the euro slightly in the week ended June 1, but were still heavily positioned against the currency, which has lost nearly 17 percent against the dollar in 2010. [IMM/FX]
The euro EUR= last traded down 0.4 percent at $1.1918. On Friday, it tumbled 1.5 percent after a weaker-than-expected U.S. jobs report suggested the global recovery may be running out of steam diminished investor taste for risk and enhanced the dollar's safe-haven appeal. Stocks traded near flat after tumbling on Friday.
The euro was 0.6 percent down at 109.22 yen EURJPY= while the dollar fell 0.3 percent to 91.64 yen JPY=. The euro hit a record low earlier at 1.3850 Swiss francs EURCHF=, and it was last down 0.4 percent at 1.3864.
The yen and Swiss franc, along with the dollar, typically gain when risk aversion is high, while investors tend to avoid currencies tied more closely to growth or commodity prices, such as the Australian dollar AUD=D4, which fell 1.5 percent to $0.8113 on Monday.
Sterling edged higher at 0.1 percent to $1.4467 GBP=D4 while the euro earlier fell to an 18-month low at 82.12 pence EURGBP=D4 as traders said investors were moving out of German bunds and into UK gilts amid fears of continued debt woes in the euro zone.
Traders say the next option trigger for the euro comes at $1.1850 and a likely target at $1.1825, the euro's March 2006 low. Below that, traders saw little support until its November 2005 low of $1.1638, though the euro's 1999 launch level of $1.1747 was also a potential key marker.
But the road there will be a winding one. The euro's "come an awfully long way in recent days and it won't head lower in a straight line," said Paul Robson, a currency strategist at RBS in London.
DATA BOOST, DEBT WOES PERSIST
A bigger-than-expected jump in German industrial orders and reasonable demand at an offer of Belgian government debt were helping to bolster the euro Monday, market participants said. [ID:nTAR001846] [ID:nLDE656107]
But debt concerns have not disappeared.
Hungary -- a member of the European Union but not the euro zone -- added to market jitters on Friday when the incoming government said the country might be facing a Greek-style crisis. [ID:nLDE6550I7]
That reignited fears about European banks' exposure to the debt of some European countries.
While the problems in Hungary are not considered as severe as those in Greece, some analysts say it may be more vulnerable to crisis since it is not in the euro zone and does not use the euro.
"Greece can't devalue or easily default on its debt, but presumably Hungary can, so it's a double-edged blade," said Michael Woolfolk, senior strategist at BNY Mellon in New York.
Euro zone governments will issue about 27.5 billion euros worth of new bonds this week, with Spain, Portugal and Italy all due to hold auctions. [GVD/EUR] <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For a graphic of European banks' exposure to Hungary, double-click: here For a graphic on CFTC futures positioning, double-click here ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>