* Germany stamps on speculative trading, unsettles markets
* Euro keeps falling, hits fresh four-year low
* Shares rattled; MSCI ex-Japan, Nikkei tumble
* High-yield currencies, metals, oil fall
* Money shifts to safe havens, Treasuries and gold gain
By Raju Gopalakrishnan
SINGAPORE, May 19 (Reuters) - The euro <EUR=> fell to a
fresh four-year low on Wednesday after Germany moved to sharpen
financial regulation, driving down commodities and Asian stock
markets as investors stampeded out of riskier assets.
Asian stocks fell sharply, as did industrial metals, on
worries that the German ban on naked short-selling of some
securities, coupled with strengthening financial regulation in
the United States, would derail the global economic recovery.
High-yielding currencies like the Australian and New
Zealand dollars also fell.
"Germany just switched off the financial lights in
Europe," said a senior forex trader at a European bank in
Singapore.
* Naked short sales of euro-denominated government bonds,
credit default swaps based on those bonds, and shares in
Germany's 10 leading financial institutions will be prohibited,
a spokesman for Germany's finance ministry said.
[]
* The euro slipped as low as $1.2143 on trading platform
EBS, its weakest level since April 2006 and taking it losses so
far in 2010 to more than 15 percent. It later recovered
slightly to around $1.2193.
* The MSCI index of Asia-Pacific shares outside of Japan
<.MIAPJ0000PUS> was down 1.74 percent at a three-month low at
384.36 points. It has fallen almost 4.0 percent since the start
of the week.
* Japan's Nikkei average <> fell 1.65 percent to a
three-month low on the regulation worries and as the weak euro
dragged on exporters.
* "Germany's move to regulate naked short selling has
heightened uncertainty about the trading environment of
financial markets, leading investors to avoid risks," said Yumi
Nishimura, deputy general manager at Daiwa Securities Capital
Markets.
* The Australian dollar <AUD=D4> fell to an eight-month low
at $0.854, with charts suggesting more losses as investors
dumped high-yielding currencies. The kiwi <NZD=D4> was down 0.6
percent at $0.6854
* Australian shares <> also hit an eight-month low.
* London three-month copper <CMCU3> dropped $135 to $6,565
a tonne, or over 2 percent. Zinc prices in Shanghai <SZNc3>
fell more than 5 percent, while London nickel <CMNI3> fell 4.7
percent on the fall in the euro.
* Crude oil futures fell to a seven-month low <CLM0>,
reflecting falls in other markets.
* U.S. Treasuries gained on a flight to safety. The yield
on the benchmark 10-year note <US10YT=RR> eased to 3.33 percent
from 3.49 percent late on Monday.
* Gold also gains on safe-haven bid. Spot gold <XAU=> rises
$5 an ounce from New York's close to $1,224.7.
(Editing by Neil Fullick)
