Investing.com - The euro moved lower against the U.S. dollar in Asian trade Thursday, after European leaders announced they had reached agreement on a broad strategy to tackle the region’s debt crisis but offered few details of the plan.
EUR/USD hit 1.3880 in early Asian trade, the pair’s lowest since Wednesday; the pair subsequently consolidated at 1.3874, falling 0.23%.
The pair was likely to find support at 1.3657, last Thursday’s low, and resistance at 1.4288, the high of September 2.
At a summit of European leaders in Brussels, European Council President Herman Van Rompuy said that finance ministers would finalize workings of a bank recapitalization plan outlined earlier Wednesday.
EU leaders had discussed a number of options, according to reports, to expand the power and reach of the USD612 billion European Financial Stability Facility, a rescue fund for debt threatened nations in the euro-zone.
The EFSF was established last year to sell bonds and raise funds to finance loans for ailing European nation’s saddled with excessive debt. The meeting in Brussels Wednesday was the 14th among government leaders to date called initially when Greece came under debt pressure, followed by threats to Ireland, Portugal, Italy and Spain.
French President Nicolas Sarkozy was reportedly hoping to enlist the support of China who would contribute to the fund by purchasing bonds issued by the EFSF.
European officials have set their sights on an expansion to the fund totaling USD1.38 trillion, according to reports.
In a late report, European banks were to be pressed to raise USD147 billion by next June in order to comply with capital requirements agreed to by European leaders in Brussels.
Elsewhere Wednesday, the U.S. Census Bureau reported that sales of new homes rose more than expected, by 5.7% in September, to 313,000 units. Market expectations were for an increase to 300,000 units for the month.
Separately, the Census Bureau announced that core durable goods orders advanced by 1.7% in September, outstripping economist forecasts of a 0.5% increase. Durable goods orders, including transportation items, fell by 0.8% in September, the second straight monthly drop.
In Wednesday trade, Wall Street shares moved higher on hopes for progress at the Brussels summit. The Dow Jones Industrial Average rose 1.39% to 11,869.00, the Nasdaq Composite Index advanced 0.46% to 2,650.67, and the S&P 500 added 1.05% to end the day at 1,242.00.
Earlier Wednesday, European shares ended the session mixed, with France’s CAC slipping 0.15% to 3,169.62, Britain’s FTSE 100 gained 0.50% to 5,553.24, while Germany’s DAX was lower by 0.51% to 6,016.07.
Meanwhile, the euro was lower against both the British pound and the Japanese yen, with EUR/GBP down 0.14% to hit 0.8690, and EUR/JPY lower by 0.20% to hit 105.69.
The U.S. Department of Labor was scheduled to release its latest weekly report on jobless claims later Thursday.