FXstreet.com (Barcelona) - European stock markets have opened the week with sharp declines as Friday's unexpected decline on U.S. Consumer Sentiment blew away risk appetite, putting an end to recent summer rally. Euro and Pound are dropping at fast pace.

Eurostoxx 50 Index is going through a 2.02% decline, while the German DAX Index drops 1.95%, and the French CAC Index declines 1.92%. In the UK, the FTSE Index trades 1.52% below its opening level.

Monday's trade is being negative for all sectors, with the retail sector leading losses, being the most affected by the negative U.S. consumer sentiment index as well as for weaker than expected earnings figures by H&M.

Euro and Pound slump

EUR/USD is weakening sharply on early European session as reversal from last Thursday's high at 1.4325 has extended below 1.4120, although the Euro managed to remain above 1.4105 and attempt to re-gain the 1.4120 level.

GBP/USD has dropped from levels right above 1.6500 to a session low at 1.6325 4-week low, although the Pound is trying to pick up reaching levels at 1.6360 at the time of writing.

USD/JPY has declined from opening levels at 94.75 to a n untra-day low at 95.35 to pick up to levels about 94.55 at the time of writing.