FOREX-Euro slumps vs dollar as debt worries reemerge

* Euro down vs dlr, 1st time in 4 days on euro zone woes

* FX Concept's Taylor sees euro to parity vs dollar

* Euro zone finance ministers meet (Updates prices, adds quotes, details)

By Julie Haviv

NEW YORK, Dec 6 (Reuters) - The euro fell on Monday as traders took profits from a three-day rally on signs of division over how to contain the euro zone's fiscal crisis.

The euro's weak performance came as euro zone finance ministers met under pressure to boost the size of a rescue fund to stop a debt crisis from spreading.

The euro zone should have a bigger rescue fund for member states in trouble, and the European Central Bank should boost its bond buying to prevent the sovereign debt crisis from derailing economic recovery, an International Monetary Fund report obtained by Reuters said. [nLDE6B40CZ]

"There is a growing discord among euro zone finance ministers, and that is weighing heavily on the euro today," said Andrew Wilkinson, senior market analyst at Interactive Brokers in Greenwich, Connecticut.

"This discord is prompting a resumption of the bearish trend surrounding the euro," he said. "If this discord continues, I fully expect the euro to be tested at $129.86 this week."

Germany's rebuff to the IMF call reinforced this discord. [ID:nLDE6B40EJ]

In early afternoon in New York the euro EUR= was down 0.90 percent at $1.3294 but above the session's low of $1.3245, according to Reuters data.

Peripheral government bond yields widened sharply against those of Germany after four days of narrowing last week.

The United States is headed for a new recession, said John Taylor, chairman and chief investment officer of FX Concepts, and that should boost the U.S. dollar and weigh on commodity prices.

He added that the euro zone is in a difficult financial situation, with Spain likely to be an issue in 2011. That could push the euro to parity versus the dollar by next year, Taylor said at the Reuters Global Investment Summit on Monday.