FXstreet.com (Barcelona) - Optimism seen in Wall Street after positive U.S. data seems to have vanished as European markets are going through declines beyond 1.0% weighed by widespread declines in the financial sector. Euro and Pound are heading lower.

Eurostoxx 50 Index drops 1.35%, while German DAX Index sheds 1.2% and the French CAC Index declines 1.4%. In the UK, the FTSE Index trades 1.2% below its opening level.

In absence of key macroeconomic figures, corporate announcements are moving European markets on Tuesday; Lloyds Bank's shares rose 3.6% after announcing that it will generate GBP21 billion of capital, and therefore, avid government participation. On the other side, RBS lost 1.7% after announcing further capital injection by the Government.

Euro and Pound weaken

EUR/USD decline from 1.4810 has extended 100 pips lower on early European session as the pair reaches 1.4710 session low at the moment of writing, approaching 1.4700 support area.

GBP/USD decline from 1.6420 high on Asian session has extended to levels right above 1.6285/00 support area, which is being tested at the moment, as the Pound has reached a session low at 1.6290.

USD/JPY remains trading at the 90.00 level on retreat from 90.70 high on Monday. At the moment of writing, the Dollar trades at 90.00 after having hit 89.85 session low.