Euro extends losses versus dollar as EU stress tests eyed

NEW YORK (Forex News Now) – The euro extended recent losses against the dollar on Monday, breaking below the 1.26 mark as FX traders awaited the publication of bank stress test results in Europe.

In early U.S. afternoon currency trading, EUR/USD traded at 1.2572, down 0.55 percent on the day.

The stress tests, which could underscore fresh financial strains, come amid fears that a massive EU rescue package will fail to halt the debt crisis that has engulfed Europe in recent months.

According to forex analysis, EUR/USD is likely to touch immediate support around the open of July 6, 1.2537, and encounter resistance around Friday’s high, 1.2722.

Also Monday, the Federal Reserve chairman, Ben S. Bernanke, said small businesses are finding it difficult to receive loans they need to stay afloat or expand and keep the U.S. economic recovery going.

Meanwhile, the euro fell versus sterling: EUR/GBP traded at 0.8372, down 0.23 percent on the day.

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