* Euro slips, hurt by profit taking and downgrade
* Moody's cuts Anglo Irish Bank ratings
* CFTC data shows shift to euro longs
* Dollar holds above 84 yen JPY=
(Adds quote, updates prices)
By Tamawa Desai
LONDON, Sept 27 (Reuters) - The euro lost ground against the dollar on Monday after ratings firm Moody's cut Anglo Irish Bank's lower-grade debt and kept it on review for a downgrade, highlighting concerns over the euro zone banking sector.
The euro hit a session low of $1.3426 EUR=, and was down nearly 0.1 percent on the day at $1.3477 by 1133 GMT, off a five-month high of $1.3496 EUR= hit on Friday. Traders said stop losses were lined up below $1.3425.
Moody's cut the nationalised bank's senior unsecured debt by three notches to Baa3 -- just one notch above junk status -- and its subordinated debt by six notches to Caa1. [ID:nLDE68Q15A]
"The Moody's downgrade was moderately significant as it takes them ahead of others ... to one notch above junk, and it still remains under review," said Adam Cole, global head of FX strategy at RBC Capital Markets.
"With the prospect of more easing by the U.S. Federal Reserve priced in, the focus may move back to Europe."
The single currency had edged lower versus the dollar on profit-taking after gaining some 4 cents since last week, and after failing to break a barrier at $1.3500, traders said.
The euro's next key level was $1.3510, a 50 percent retracement of its fall from above $1.51 last November to its June low below $1.19.
Still, investors will be cautious about pushing the euro too high before banks repay 225 billion euros in European Central Bank loans. The tenders are due to expire this week, with banks preparing to repay 12-, six- and three-month funds on Thursday.
If the results highlight more banking sector troubles, traders may turn cautious on the euro, though other analysts say a withdrawal of funds from the system will boost lending rates and provide support for the single currency.
The latest data from the Commodity Futures Trading Commission showed currency speculators moved to a net long position in the euro for the first time this year. [IMM/FX]
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