Euro falls on fears of contagion

The euro fell further against the dollar in Asia Mondayon recurring fears of contagion from the ongoing debt crisis in the eurozone.The single European unit dropped to $1.4188 in Tokyo afternoon trade from $1.4258 in New York late Friday. The European single currency retreated to 114.59 yen from 114.91 yen. The dollar fetched 80.76 yen against 80.55 yen.The euro lost ground against the dollar on Friday despite a bleak US employment report for June, as fears that the euro zone debt crisis would spread to Italy dampened sentiment, dealers said.Traders sold Italian debt and Italian banking stocks as they worried about the possibility the country would be undermined by the same debt concerns as those hitting Greece, Portugal and Ireland.The euro is weak amid worries about Italy, said Teppei Ino, analyst at the Bank of Tokyo-Mitsubishi UFJ. The liquidity crisis is not expected now, but the market is closely watching upcoming European events.The market remained jittery ahead of a top European officials meeting later in the day and the release this week of results of stress tests being carried out on Europes banking system.Top EU economic officials will meet Monday in Brussels to coordinate their positions on the second Greek rescue package as Europes debt crisis threatens to deteriorate, a spokesman of the EU president told AFP.The meeting will come before euro zone finance ministers head into fresh talks to craft the new Greek rescue package, as serious disputes remain over the role to be played by the private sector.The euro moved lower against the dollar on concerns that talks of Greek debt restructuring may finally occur, Daisaku Ueno, chief analyst at Gaitame.Com Research Institute, told Dow Jones Newswires.