LONDON (AFP) - The European single currency and stock markets fell sharply on Wednesday after Moody's rating agency placed Spain on review for a possible downgrade, refocusing attention on the eurozone debt crisis. The euro plunged as low as 1.3286 dollars in early morning deals, compared with 1.3375 dollars late in New York on Tuesday. And the shared eurozone unit tumbled to a record low point against Switzerland's safe-haven currency, hitting 1.2759 Swiss francs. "News that Moody's has put Spain's debt rating on review has knocked the euro," said Rabobank analyst Jane Foley. "The news plays on fears that contagion could extend to the Spanish bond market, though it does not enlighten the market much further with respect to the underlying issues with respect to Spain." The Madrid stock market dived 2.01 percent, Frankfurt dropped 0.72 percent, London shed 0.37 percent and Paris fell 0.84 percent. Moody's announced it could cut Spain's credit rating again because of heavy debt refinancing needs for the year ahead, banking problems and high-spending regions. "Moody's believes that the ... downside risks warrant putting Spain's rating under review for downgrade," top Spain analyst Kathrin Muehlbronner said in a statement. "However, Moody's also wants to stress that it continues to view Spain as a much stronger credit than other stressed eurozone countries ... Moody's review will therefore most likely conclude that Spain's rating will remain in the Aa range." The agency cut Spain's sovereign debt rating from Aaa to Aa1 in September, adding to the pressures on Madrid and the wider eurozone. In response, the Spanish government said it aimed to convince Moody's over the next three months to abandon the threatened downgrade. Wednesday's grim news comes one day after Standard & Poor's lowered its outlook for Belgium from stable to negative. "The euro tested back below 1.33 dollars after Moody's said it may downgrade Spain's credit rating, reminding the markets that S&P had done the same with Belgium 24 hours before," said analyst Ilya Spivak at trading website Daily FX. The developments have rattled investors ahead of a European summit on Thursday and Friday in Brussels, where EU leaders will seek to hammer out proposals for a permanent rescue mechanism for debt-ridden nations. Later on Wednesday, Ireland's parliament will vote on a 85-billion-euro (113-billion-dollar) EU-IMF bailout, which comes hot on the heels of the rescue of debt-plagued Greece in May. Asian equities meanwhile reacted sluggishly on Wednesday to overnight gains in New York, with Tokyo held back by a downturn in Japanese business confidence. Wall Street climbed higher on Tuesday after a decision by the US Federal Reserve to maintain near-zero interest rates and a 600-billion-dollar asset purchase programme.