Forexpros – The euro extended losses against the U.S. dollar on Wednesday, as the cost of insuring Italian and Spanish government debt against default rose, amid fears that the euro zone’s bailout fund may be insufficient to prevent sovereign debt contagion.
EUR/USD hit 1.4456 during European early afternoon trade, the daily low; the pair subsequently consolidated at 1.4472, shedding 0.25%.
The pair was likely to find support at 1.4356, Tuesday’s low and resistance at 1.4577, a three-week high.
Finance Minister Wolfgang Schaeuble said earlier that Berlin was against a “blank check” for the European Financial Stability Facility to purchase bonds on the secondary market.
Schaeuble also said European governments must prevent a breakup of the euro region as well as an “uncontrolled” exit of one of its members.
The comments sparked fresh concerns that last week’s agreement on a second bailout package for Greece has not fully addressed the issues relating to the euro zone’s sovereign debt crisis.
Elsewhere, the greenback remained under pressure as talks on raising the U.S. debt ceiling remained at an impasse, adding to concerns over a possible U.S. debt default or downgrade ahead of the August 2 deadline.
The euro was also lower against the pound, with EUR/GBP slipping 0.13% to hit 0.8832.
Later in the day, the U.S. was to publish official data on durable goods orders, while the U.S. Federal Reserve was to publish its Beige Book.
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