Euro hits low as contagion fears spread EURO-zone debt worries have reached Italy as contagion fears pushed the euro to an all-time low against the Swiss franc. The common currency fell as low as CHF1.1844 against the safe-haven franc over fears the Greek sovereign crisis was gaining a greater foothold outside the country's borders and in the region's banking system. Trading in Italian bank shares was suspended due to high volatility in Milan after ratings agency Moody's Investors Service said it was considering downgrading the creditworthiness of a group of the country's banks. Italy's sovereign 10-year yield spread over German bunds reacted by climbing to 213 basis points-the widest since the birth of the euro in January 1999. "There are concerns over contagion since Italy's economy is very weak and also over the lack of transparency in the banking sector," Peter Rosenstreich, associate director and chief market analyst with Switzerland's Swissquote Bank SA, said. Without a total and credible solution to the Greek and [European Union] sovereign debt crisis, all EU nations are susceptible to sudden exodus of confidence and capital. But Greece isn't escaping the spotlight. Future International Monetary Fund and EU aid is contingent on Greece's parliament next week approving a stringent austerity plan. Given that Greek Prime Minister George Papandreou's new government won a confidence vote by a thin margin Tuesday, the euro faces more uncertainty next week. "We are still some way off from knowing whether the tin can that is the Greek fiscal crisis will be successfully kicked down the road next week," Raymond Attrill, senior currency strategist with BNP Paribas in New York, said of parliament's vote. If it passes, Attrill said the euro "could be looking up to and through 1.45." If not "we are headed for a tragedy where Greece refuses to sign up for the EU and IMF medicine, and the EU attention turns to protecting their own banking systems directly rather than via assistance to Greece and euro plummets into the 1.30s," he said, adding "it seems more likely that the Swiss franc and U.S. dollar will be the main beneficiaries of intensification of euro stress." Bank of England Governor Mervyn King weighed yesterday, saying the euro-zone fiscal crisis represented the largest single threat to UK financial stability. King called on British banks to provide more information on any sovereign debt holdings and exposure to banking sectors of troubled nations. Late Friday the euro was at $1.4192 from $1.4256 late Thursday, according to EBS via CQG. The dollar was at Y80.43 from Y80.51, while the euro was at Y114.12 from Y114.77. The U.K. pound was at $1.5967 from $1.6007. The dollar was at CHF0.8328 from CHF0.8387. The ICE Dollar Index, which tracks the U.S. dollar against a basket of currencies, was at 75.589 from about 75.447. "Any way you slice it, there is considerable risk to the euro, which European policy makers completely don't have a solution for," Swissquote's Rosenstreich said. "If Greece rejects the EU and IMF austerity or if Spanish banks need more lending, this will have a devastating consequence for the euro and give safe haven FX trades a massive boost," Rosenstreich said, adding, "Any good news such as Greece passing austerity and Germany being able to wait to lend the money will have a limited upside for the euro."