* Worries about French banking sector hit euro
* Swiss franc falls against dollar after SNB measures
* Dollar/yen close to record lows, intervention risk rises (Adds comment, updates prices, changes byline)
By Gertrude Chavez-Dreyfuss
NEW YORK, Aug 10 (Reuters) - The euro fell against most major currencies on Wednesday, while commodity currencies dropped on persistent global economic uncertainty and worries about French banks with large exposure to peripheral euro zone debt.
French bank stocks were hit hard in Paris trading, with
Societe Generale
Sharp losses in the French banking sector spilled over to the U.S. stock market, which has yet to recover from Friday's U.S. credit rating downgrade by Standard & Poor's.
"The sell-off in the euro appears to be a risk-related move in general,' said Bob Lynch, global head of G10 currency strategy, at HSBC in New York.
"U.S. stocks were quite weak at the open. They have stabilized to lower levels since then and that has been the pattern as well for euro/dollar."
The euro last traded down 1.0 percent at $1.42310, after sliding to a session low of $1.41620 on trading platform EBS
It was the euro's worst performance against the yen in a month.
The euro zone common currency also came under pressure on earlier market talk of a possible downgrade of France's AAA credit rating. The country is seen as vulnerable after Standard & Poor's cut the United States' credit rating by one notch to AA-plus last Friday.
But those concerns faded after all three major ratings agencies -- Fitch, Moody's and Standard & Poor's -- reaffirmed their AAA ratings on France with a stable outlook.
SWISS FRANC PULLS BACK
The euro dropped 0.2 percent to 1.03630 Swiss francs
Implied volatility, a measure of the market's expectations of future movements, remained at extreme levels, with one-month euro/Swiss franc implied vols
The dollar fell 0.4 percent to 76.760 yen. It hit a session low of 76.347 on EBS
Traders said there doesn't seem to be much action in dollar/yen as investors on Wednesday preferred to go long the Japanese currency versus the euro. The single euro zone still has a long way to go before it hits record lows seen in mid-March.
The dollar jumped 0.8 percent against the Swiss franc to 0.72825 franc
The dollar plunged more than 5 percent against the franc at one point on Tuesday, its worst trading day ever.
Analysts, however, said the SNB's measures would do little to halt exceptionally strong demand for the safe-haven franc after the Federal Reserve on Tuesday underlined the state of the struggling U.S. economy and promised to hold interest rates low for at least two years. [ID:nL6E7JA0BI] [ID:nN1E7781WQ]
Goldman Sachs said it expects dollar-negative forces to strengthen and recommends that clients go short on the U.S. dollar on additional easing from the Fed.
"The Fed yesterday shifted to a more dovish stance," Goldman wrote in a note to clients. "The Fed also said it stands ready to increase its balance sheet further, leading our U.S. economists to think (a third round of quantitative easing) now has a more than even chance of becoming reality."
"All this suggests the dollar will likely continue to weaken on a broad basis," the bank said.
The higher-yielding Australian dollar
Sterling fell 0.9 percent to $1.6165 after the Bank of England cut its growth and inflation forecasts