* Euro slumps to four-year low against the dollar
* ECB's Nowotny says euro in "normal range"
* EU Chairman Jucker says worried about pace of euro fall
* Sterling falls to lowest since mmarch 2009 (Updates prices, adds comment, byline)
By Gertrude Chavez-Dreyfuss
NEW YORK, May 17 (Reuters) - The euro fell for a fifth straight session against the dollar on Monday, dropping to a four-year low on nagging fears euro zone austerity measures will cause a downturn in the region and curb global growth.
A 750-billion euro bail-out package from the European Union and the International Monetary Fund aimed at shoring up euro zone bond markets has done little to improve sentiment on the euro.
Some analysts expect the euro to fall below $1.20 over the next few weeks despite a huge volume of bearish bets against it that would normally suggest a reversal higher is imminent.
In this case, analysts expect a combination of negative sentiment and momentum to carry the currency lower.
"Raising more debt to pay old debt is not necessarily the way for Greece to accomplish what needs to be accomplished," said John McCarthy, director of foreign exchange trading at ING Capital Markets in New York. "It's a package that raises more questions than answers and wouldn't necessarily alleviate the euro zone debt crisis. We expect the euro to slip further."
In early afternoon New York trading, the euro was down 0.2 percent against the dollar at $1.2340. Earlier in the global session, the euro fell as low as $1.2234, according to electronic trading platform EBS, the lowest in more than four years.
The euro earlier in New York climbed into positive territory against the dollar in technical trading. Investors holding short positions on the currency got squeezed when dealers hit stop-loss orders as the currency headed to the $1.2400 level. That move, however, was short-lived.
The euro has fallen more than 7 percent against the dollar this month, and is nearly 14 percent lower for the year, making it the worst-performing major currency.
Technical analysts said the next key support was at $1.2135, the 50 percent retracement of the rally from the all-time lows near $0.82 to the record highs just above $1.60.
European Central Bank policymaker Ewald Nowotny said the fall in the currency was not a cause for concern, adding the exchange rate was in a "normal range" and there was no reason for hysteria about it..
However, Eurogroup Chairman Jean-Claude Juncker said on Monday he was worried about the pace of the euro's fall than the exchange rate itself.
The ECB on Monday bought 16.5 billion euros worth of bonds in the first week of its government debt buying program to help resolve the euro zone's debt crisis.
Analysts said widening euro zone problems had prompted a money market dollar liquidity shortage.
"If the sharp deterioration in money markets persists into this week, look for central bank action to lower the cost of access to their dollar funding facilities," Citibank analysts said in a note.
Meanwhile, data released on Friday showed speculative bets against the euro hit a record high in the week to May 11.
Against the yen, the euro traded down 0.5 percent at 113.82 yen after falling to 112.47 in Asia trade. The dollar was last at 92.23 yen, down 0.2 percent from Friday's close.
Sterling slid to its lowest since March 2009 at $1.4249 before rising back to $1.4433, still down 0.8 percent on the day. The pound was hit by data showing the past year's rise in British house prices may be cooling.
(Additional reporting by Nick Olivari; Editing by Andrew Hay)