Euro, Asian stocks down as debt jitters trump US data

The euro sank against the dollar and the yen and Asian stocks stalled on Monday, as renewed gloom about the fallout from the European sovereign debt crisis overshadowed signs of vigour in the US economy.

Data on Friday showed that while US employment growth accelerated last month, euro zone retail sales fell and economic sentiment soured at the end of 2011, pointing to recession in the currency bloc.

Worries over Europe intensified with a debt rating downgrade to junk status for Hungary -- a member of the European Union but not part of the euro zone -- and a report in German magazine Der Spiegel that the International Monetary Fund was losing confidence in Greece's ability to clean up its public finances.

"Despite the positive US employment data, investor focus remains largely on Europe, especially after the downgrade of Hungary's credit rating," said Lim Tae-geun, an analyst at Daewoo Securities in Seoul.

The euro fell to a 16-month low around $1.2670, and dropped as far as an 11-year low at 97.47 yen. The dollar, meanwhile, rose 0.2% against a basket of major currencies.

MSCI's broadest index of Asia Pacific shares outside Japan fell 0.3%. The index had finished the first week of 2012 slightly higher, after shedding 18% in 2011. Tokyo markets were closed for a holiday.

The upbeat economic data failed to perk up US stocks on Friday, and S&P 500 index futures fell 0.5% in Asian trading, pointing to further losses when Wall Street opens later.

US crude oil eased slightly to $101.40, after climbing above $100 a barrel last week as rising tensions between Iran and the West raised fears of supply disruptions.