The euro tumbled against the dollar on Monday after European Union leaders failed to agree on a long-term budget, deepening a crisis triggered after French and Dutch voters rejected a proposed EU constitution. In early Asian trade, the euro shed about one cent, halving the gain made on Friday when it hit a nine-day high as a record U.S. current account deficit sapped appetite for the dollar. "Recent events show how difficult further European integration will be," said Seiya Nakajima, chief economist at Itochu Corp. The euro fell as low as around $1.2170. That compares with around $1.2285 in late U.S. trade on Friday, when it rose as high as $1.2289. The euro's fall also drove the Japanese currency down, with the dollar rising as high as around 109 yen from around 108.60 yen. "There's fresh concern about the euro after the EU summit," said a trader at a Japanese bank. Before the summit on Friday, the euro jumped nearly two cents after data showed the U.S. current account shortfall swelled to $195.1 billion -- or 6.4 percent of U.S. gross domestic product -- in the first three months of this year. That was above the $190 billion forecast by economists and up from $188.4 billion in the final quarter of last year. Traders said the huge deficit could make investors think twice about buying dollar assets, possibly capping the currency's advance in the near future. Data from the U.S. Commodity Futures Trading Commission showed on Friday that speculators sharply increased their net short position in the yen and sterling against the dollar in the week that ended on June 14. The dollar hit an eight-month high of 109.72 yen last week. Traders said the currency was unlikely to break through that level for now given sizeable selling by Japanese exporters.