* Fitch downgrades Spain's credit rating by one notch
* Euro on track for biggest monthly fall since Jan 2009 (Updates prices, adds quote, changes byline)
By Wanfeng Zhou
NEW YORK, May 28 (Reuters) - The euro fell across the board on Friday after Fitch Ratings downgraded Spain's credit ratings on concern that austerity measures will dampen the country's economic recovery.
The euro was on track for a hefty 7.5 percent decline in May, in what would be the sixth consecutive monthly fall and the biggest percentage drop since January 2009.
Fitch cut Spain's long-term foreign- and local-currency issuer default ratings to AA-plus from AAA, saying the country's economic recovery will be "more muted" than the government forecast due to its austerity measures. The outlook on the new ratings is stable. For more, see [ID:nWNA2365]
"There are still some strong concerns about the euro," said Samarjit Shankar, managing director of global FX strategy at BNY Mellon in Boston.
"In the grand scheme of things, this is pretty much expected," Shankar said of the downgrade.
The euro fell as low as $1.2284 after the Fitch downgrade, according to electronic trading platform EBS, near a session low. It recovered slightly to last trade down 0.5 percent at $1.2301 EUR=.
Analysts said a key support level is $1.2135, the 50 percent Fibonacci retracement of the 2000-08 advance, just above the recent four-year low of $1.2143. Charts further show a monthly close below $1.2135 would favor more weakness, with analysts seeing the next downside support at $1.1640, a low hit in November 2005.
Dan Cook, senior market analyst at IG Markets in Chicago, said the downgrade came on a day "when the market is already paper thin, so we may not see the full effect until we open after the weekend."
Against the yen, the euro was down 0.8 percent at 111.72 yen EURJPY=R, after hitting an intraday low of 111.40 on EBS.
The dollar JPY= slipped 0.2 percent to 90.84 yen, while the dollar index .DXY, which measures the greenback's performance against a basket of currencies, was up 0.5 percent at 86.592.
Analysts said concerns about the euro zone's debt troubles remain entrenched.
Shaun Osborne, chief currency strategist at TD Securities in Toronto, cited a heavy debt auction schedule ahead in the euro zone and some lumpy government bond redemptions over the next few months, which could turn the market's focus to Italy.
"While Italy may not be aw structurally vulnerable as Greece or Portugal, the relative underperformance of Italian credit default swaps this month suggests that investor concerns may be rotating away from Greece," Osborne said. (Additional reporting by Gertrude Chavez-Dreyfuss and Nick Olivari; Editing by Leslie Adler)