Forex Pros – The euro extended losses against the U.S. dollar on Monday, tumbling to a fresh two-week low, pressured by fears that the region’s sovereign debt crisis may spread to Italy from Greece.
EUR/USD hit 1.4109 during European early afternoon trade, the pair’s lowest since June 27; the pair subsequently consolidated at 1.4114, shedding 1.04%.
The pair was likely to find support at 1.4101, the low of June 27 and a seven-day low and resistance at 1.4368, Friday’s high.
Later in the day, senior European Union officials, including European Central Bank President Jean-Claude Trichet and EU economy commissioner Olli Rehn were to meet to discuss a second bailout package for Greece and assess the risk of the sovereign debt crisis spreading to Italy.
The meeting was called after the cost of insuring Italian sovereign debt against default rose sharply on Friday amid concerns over the country’s sovereign debt load, ahead of the release of European bank stress test results later this week.
The euro was also sharply lower against the yen, with EUR/JPY dropping 0.92% to hit 113.95.
The single currency was also weighed after a Financial Times report on Sunday said some euro zone officials were looking at accepting a partial default of Greek debt in order to put the country’s debt on a more sustainable footing.
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