LONDON, Aug 8: The euro skidded lower against the dollar on Friday on fears of a recession in the single currency area after Italy reported a contraction in the second quarter, dealers said.

The euro fell to 1.5049 dollars in late European trade, down sharply from its level of 1.5321 dollars in New York late on Thursday.

The dollar stood at 110.51 yen from 109.46 yen on Thursday.

The Italian economy contracted in the second quarter, official data showed on Friday, adding to a deepening sense of gloom about the eurozone economy amid a flurry of bad news for the 15-nation bloc.

Italy is the first eurozone country to reveal figures for the second quarter and a 0.3 per cent quarter-on-quarter contraction underlines fears that a severe slowdown, even a broad European recession, could be looming. European Central Bank president Jean-Claude Trichet, announcing unchanged interest rates on Thursday, recognised evidence of weakening of the eurozone economy in comments which sent the euro into a tailspin.

In London trade on Friday, the euro changed hands at 1.5049 dollars against 1.5321 late on Thursday, at 165.51 yen (167.72), 0.7837 pounds (0.7882) and 1.6253 Swiss francs (1.6276).

The dollar stood at 110.06 yen (109.46) and 1.0806 Swiss francs (1.0622).

The pound was at 1.9187 dollars (1.9435).

On the London Bullion Market, the price of gold fell to 852.50 dollars per ounce from 871.50 dollars late on Thursday.—AFP