* Euro falls below $1.23, near Monday's four-year low
* Germany announces naked short-sellling ban (Adds comment, updates prices, changes byline)
By Wanfeng Zhou
NEW YORK, May 18 (Reuters) - The euro tumbled against the U.S. dollar on Tuesday on persistent concerns deep government spending cuts in Europe will stifle growth and after Germany said it plans to ban naked short-selling.
The euro fell as low as $1.2255 after the German announcement, still slightly above a four-year low of $1.2234 set on electronic trading platform EBS on Monday.
The German government plans to ban naked short-selling from midnight in the country's 10 most important financial institutions, a spokesman for the Finance Ministry said on Tuesday in Berlin. The ban will also apply to credit default swaps (CDS) on euro government bonds as well as euro government bonds. For details, see [ID:nN18512882].
"It tends to suggest desperation on the part of the German officials who want to discourage what they consider speculative attacks on euro-zone financial markets," said Michael Malpede, analyst at Easy Forex in Chicago.
"The mood is very bearish, but I still think we're due for a correction, as the market is heavily oversold."
In afternoon trading in New York, the euro was down 1.1
percent at $1.2264
On Monday, the euro hit a low of $1.2234 on EBS, the lowest level since April, 2006. Worries about the long-term economic impact of austerity measures adopted across Europe have weighed on the single currency in recent weeks. Since the beginning of the year, the euro has lost more than 14 percent versus the greenback.
The euro also fell 1.3 percent to 113.15 yen
"We think the momentum was to the downside even before the short-selling news, but critics could say that the Europeans continue to fret about the symptoms rather than the actual illness and so could have accelerated this latest move in the euro," said Win Thin, senior currency strategist at Brown Brothers Harriman.
Thin expects the euro to hit $1.18 in the near term.
The euro is a "fundamentally strong" currency and the European Union's economic fundamentals are safe, European Union President Herman Van Rompuy said on Tuesday. [ID:nBRU010832] (Additional reporting by Steven C. Johnson; Editing by Kenneth Barry)