The euro is clawing back ground on the dollar after falling below below 1.19 dollars in Asian trading for the first time since March 2006 amid fresh concerns over the EU budget.

In London, the euro was changing hands at 1.1971 dollars, compared with 1.1972 dollars on Friday.

The European single currency briefly plunged to 1.1876 dollars in Asian tradethis morning , its lowest level for more than four years.

The euro also fell against the yen, to 109.75 yen, compared to 110.01 yen on Friday.

The dollar was down to 91.67 yen compared to 91.88 yen on Friday.

Markets were riled when a spokesman for the recently elected Hungarian prime minister compared the country's fiscal health to that of Greece, dealers said.

"Rising fears about Hungary’s fiscal situation spurred investors to sell the European currency," said analysts at ETX capital.

Neil McKinnon of VTB Capital said: "Eurozone debt and banking problems remain paramount."

He said worries about a "double-dip" recession were rising. "Are we moving from a V to the downleg of the W?" he asked.