By: Barbara Zigah

In Asian trading today, the common currency fell to a new historic low against the safe haven Swiss Franc, and a 4-month low versus the U.S. Dollar as investors worry over contagion of peripheral debt. As reported at 12:59 p.m. (JST) in Tokyo, the Euro traded at 1.1660 Swiss Francs, a fresh record low before settling at 1.1690 Swiss Francs, still a 0.3% decline from the previous day. Against the greenback the Euro was trading at $1.3932, the lowest since mid-March before rebounding to $1.3962, a 0.5% drop. The Euro remains on the defensive even as finance ministers from the Eurozone met to discuss new measures aimed at solving the Eurozone’s debt problems.

The markets are particularly worried about contagion following the sell-off in the Italian bond auction with the spread between Italian bonds and German bunds widening steeply, by more than 300 basis points. One Forex strategist in Tokyo said that the Italian crisis took investors by surprise, expecting, if anything, that Greece’s problems would spread first to Spain.

Generalize weakness in the common currency helped to push the U.S. Dollar Index higher, to 76.370 .DXY, the highest since early April. The U.S. Dollar Index measures the greenback’s value against major currencies, which includes the Euro.