The Australian dollar struggled against a broadly stronger greenback on Tuesday, but held near 2-1/2 month highs against the euro after Greece failed to receive an immediate financial aid it was counting on.

The euro dipped to a two-month low against the dollar after the eurozone and the International Monetary Fund clashed over a long-term plan to reduce Athens's debt pile.

The news hit hard commodity prices as well as Asian shares, with Australian stocks skidding around 1.5 per cent.

It also dragged the common currency lower against the Aussie. The dollar was last buying 82.05 euro cents. The euro has lost more than 5 per cent against the Aussie in a month.

"The Australian economy is doing well, China is picking up while Europe is in recession," said Peter Pragicevich, a strategist at Commonwealth Bank of Australia.

"The European Central Bank still has a bias to ease policy, whereas the RBA looks to stay on hold for a few months and all of that is in the Aussie's favour."

The Antipodean retreated against its US counterpart as the uncertainty surrounding Greece's ongoing debt drama weighed on risk appetite.

The Aussie dipped to $US1.0402, from $US1.0426 in New York, retreating from a seven-week peak of $US1.0480 touched last week.

Not helping was a private survey showing a sharp fall in Australian business conditions as wholesalers and manufacturers suffered from slack demand. Key support was seen at $US1.0350-$US1.0370 range, which contains the 20-, 50-, and 100-day moving averages.

"We are seeing some US dollar strength this afternoon. Equities are having a bad day in Asia and the situation is getting worse rather than getting better in the euro," said Tim Kelleher, head of institutional FX sales at ASB Bank.

"The market is not going anywhere too far but certainly this afternoon, risks continue to drift off," he added.

Australian government bonds rose, with the three-year contract adding 0.03 points to 97.490. The 10-year contract also gained 0.03 points to 97.035, not far from a one-month peak of 97.065 on Monday.

Reuters