LONDON, June 21 (Reuters) - The euro and Australian dollar hit their highest levels in about a month on Monday after China allowed the yuan to rise to a post-revaluation high, though analysts said option barriers were hampering further gains.

Spot yuan rose to its highest level since its revaluation five years ago, adding to hopes that a pledge from China on yuan flexibility would begin to reduce global imbalances and ease tensions in the Group of 20 leading economies ahead of a meeting next week.

This move takes the focus off China going into the G20. It has supported risk appetite, which was already improving, and high-yielders have been the main beneficiaries, said Lauren Rosborough, senior currency strategist at Westpac.

The dollar slipped versus a basket of currencies .DXY to trade at a one-month low in Asia of 85.091, in turn allowing the euro EUR= to rally to $1.2490 versus the dollar on trading platform EBS, its highest level since May 24.

By 0723 GMT, the euro had eased back to trade with gains of around 0.4 percent at $1.2440. Traders said there were options at $1.2500 preventing further gains for the single currency, reportedly being protected by a major Asian sovereign account.

The euro had closed on Friday with its best weekly gain since May 2009 after a successful Spanish bond auction eased concerns over the health of Spain's public finances, prompting investors to scale back bets against the single currency.

The recovery, however, is still fragile.

China's announcement will play into the tone of firmer risk appetite at the beginning of the week but the move in some risk currencies, especially the euro, is looking increasingly stretched, said currency analysts at Credit Agricole in a note to clients.

HIGH-YIELDERS

The higher-yielding Australian dollar AUD=D4 gained 1.4 percent to around $0.8838, just off earlier highs of $0.8848, a one-month peak, as European equities .FTEU3 opened with strong gains, tracking Asian bourses.

The MSCI Asia Pacific index was up 2.6%, with strength seen across the region as China's policy statement is seen as a strong sign of confidence in the global recovery story. said analysts at Brown Brothers Harriman in a note to clients.

The New Zealand dollar NZD=D4 also rose nearly one percent to $0.7130, after having climbed to a five-week high of $0.7140.

A more flexible yuan would lessen the threat of a Sino-U.S. trade war, which could have been a danger to global growth, and enable China to buy more commodities, or at least cope better with higher commodity prices, a positive for big resource exporters like Australia and New Zealand.

A higher yuan would also help temper inflation in China by pushing down import prices, which in turn could mean Beijing would have less need to tighten monetary policy aggressively.

Markets have been worried China could over-tighten and slow its economy too far.

Breaking the peg might also mean China needs to buy less U.S. dollars in intervention, which would leave it with fewer dollars to buy U.S. Treasuries, but also less need to diversify its holdings into currencies like the euro.

The low-yielding yen slipped versus the euro EURJPY=R, which traded at 113 yen in early European dealing, up 0.5 percent on the day. The dollar was steady versus the yen JPY= at 90.80 yen. (Additional reporting by Satomi Noguchi, editing by Patrick Graham)

Australia China