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Forex - EUR/USD lower in early Asian trade

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Forexpros - The euro extended losses against the U.S. dollar Wednesday, as European financial stocks posted steep drops due to continued worries of debt insolvency in the euro-zone.

EUR/USD hit 1.4179 in early Asian trade, the pair's highest since Monday; the pair subsequently consolidated at 1.4143, dropping 0.25%.

The pair was likely to find support at 1.4070, last Friday's low, and resistance at 1.4426, Monday's high.

Worries about the financial health of French banks, particularly Societe Generale, spawned a downturn in European and U.S. financial institutions in Wednesday trade. SocieteGenerale saw its shares plummet by 14.7%.

French President Nicolas Sarkozy held a meeting Wednesday with the governor of the Bank of France to discuss the country's economic and financial situation..

Earlier in the day, a Treasury Department report showed the federal budget balance fell less-than-expected to a seasonally adjusted USD129.4 billion in July, from USD43.1 billion in the preceding month.

Forecasts were for the U.S. federal budget balance to fall to USD140 billion last month.

Wall Street shares returned to the red Wednesday, as the Dow Jones Industrial Average dropped 4.6%, the Nasdaq Composite Index lost 4.1%, and the S&P 500 retreated 4.4%.

The euro was lower against both the British pound and the Japanese yen, with EUR/GBP slipping 0.12% to hit 0.8776 and EUR/JPY down by 0.26% to hit 108.66.

The European Central Bank was scheduled to release its monthly economic report Thursday.

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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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