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Forex - EUR/USD eases in early Asian trade

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Forexpros - The euro extended losses against the U.S. dollar Tuesday, as dealers relieved that the U.S. reached a deal to raise the nation's debt ceiling, turned their attention to Europe and local prospects of debt sovereignty issues in the euro-zone.

EUR/USD hit 1.4204 during early Asian trade, the pair's highest since July 20; the pair subsequently consolidated at 1.4173, falling 0.23%.

The pair was likely to find support at 1.4152, today's low, and resistance at 1.4453, Monday's high.

Earlier Tuesday, the U.S. Senate approved a bill to increase the USD14.3 trillion debt limit by USD2.4 trillion. The Congressional Budget Office estimated that the measure would reduce deficits by USD2.1 trillion over the next ten years. President Barack Obama then signed the bill into law.

As U.S. default fears eased, attention turned to Italian Prime Minister Silvio Berlusconi who, in a nationally televised address, sought to reassure the nation his government was taking the necessary steps to prevent Italy from becoming the next victim of Europe's debt crisis.

Berlusconi, facing calls for his resignation, record bond yields and an Italian equity market that has fallen to 27-month lows, had been able to secure passage of a July 15 austerity plan as part of continuing efforts to display a serious attempt by Italy to strengthen its finances.

Italian debt stood at USD2.6 trillion, which represents 120% of the nation's gross domestic product, second only to Greece's debt burden among euro-zone members.

The euro was lower against the both the British pound and the Japanese yen, with EUR/GBP dipping 0.06% to hit 0.8708 and EUR/JPY down by 0.04% to hit 109.57.

Monthly figures on non-farm private employment from the U.S. Labor Department were due out during the session Wednesday.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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