Euro tumbles in Asian trade

The euro was beaten down further in Asia on Tuesday, plunging to a record low versus the Swiss franc and sinking to a four-month trough against the dollar on growing concerns that the eurozone's sovereign debt crisis was spreading. The single currency fell as low as $1.3932 - its lowest since March 17 - after a slew of stop-loss orders were triggered below $1.3980. The euro fell broadly, dropping to an all-time low of 1.1660 Swiss franc.
The euro was on the defensive as an emergency meeting by European financial officials failed to offer fresh measures to tackle the region's debt problems, dealers said. Market participants were especially concerned about the debt of countries such as Spain and Italy, which came under strong selling pressure the day before.
"The market has become particularly concerned due to the sell-off in Italian bonds. A steep widening of the spread between Italian and German bonds is making the market worried," said Osamu Takashima, chief forex strategist at Citibank in Tokyo. The spread on the 10-year Italian bond yield over that of German bonds widened to above 300 basis points the previous day from about 180 bps at the start of the month.
The euro was bought back against the Swiss franc by late Asian trade, trading down 0.1 percent at 1.1 716 franc. Against the yen, the euro was down 0.6 percent at 111.86 after falling as far as 111.67 - the lowest since March 18. Against the dollar, the single currency dropped 0.5 percent to $1.3959. Support is seen around $1.3905/10, a 50 percent retracement of the January-May rally as well as the 200-day moving average.
Global macro funds were detected selling the euro actively in Asia, traders said. Some traders said the euro came under pressure as IMF Managing Director Christine Lagarde failed to comment specifically on resolving Greece's problems. The dollar index was up 0.4 percent at 76.269.
"I feel that the eurozone debt situation particularly deteriorated after Portugal was downgraded to junk status last week. The market again started to focus on the debt problem as being a problem for the whole region," said Kimihiko Tomita, head of foreign exchange at State Street and Trust. The dollar fell 0.1 percent to 80.15 yen, pressured mainly by the yen's firmness against the euro, but the US currency met solid bids slightly above 80 yen.