The euro slipped against other major currencies in early European deals on Monday, thus paring the gains it made in early Asian deals. The euro eased from near an 8-week high against the yen and a 6-day high against the franc.
Following news that majority of European banks passed the stress test on Friday, most Asian stocks traded in green today. Taking cues from Asia, most European stocks advanced, but some of them pared gains shortly and trading flat.
Seven out of the 91 banks tested in the European Union’s stress tests failed, Committee of European Banking Supervisors (CEBS) said Friday.
CEBS said that seven banks, including five Spanish regional lenders, would see their Tier 1 capital ratios fall below 6% if the test’s most adverse scenario played out.
“The aggregate results suggest a rather strong resilience for the EU banking system as a whole and may appear reassuring for the banks in the exercise, although it should be emphasized that this outcome is partly due to the continued reliance on government support for a number of institutions,” CEBS noted in a statement.
While most economists predicted ten or more banks would not pass the test, the failure of seven “should not be seen as a reason for complacency,” CEBS added.
Against the yen, the euro eased after climbing to near an 8-week high of 113.49 during early Asian session on Monday. As of now, the euro-yen pair is trading at 112.43, compared to last week’s closing quote of 112.89. If the euro falls further, it may target around the 111.6 level.
Japan’s Ministry of Finance said today that the nation saw a merchandise trade surplus of 687.0 billion yen in June. This was roughly in line with analyst expectations for a surplus of 690.9 billion yen following the revised 320.9 billion yen surplus in May.
Exports for the month climbed 27.7% on year, topping expectations for a 23.5% annual increase after the 32.1% surge in the previous month. Imports in June jumped 26.1% on year, slightly above forecasts for a 24.7% annual rise following the 33.4% jump a month earlier.
The euro is now trading at 1.3595 against the Swiss franc, fell from a 6-day high of 1.3633 hit at 1:05 am ET Monday. On the downside, the euro may target around the 1.338 level.
The euro-pound pair is now worth 0.8337, a depreciation of 0.44% from last week’s close of 0.8374. The euro may target around the 0.832 level, if it drops further.
The euro-dollar pair that rose as high as 1.2959 at 2:45 am ET Monday lost momentum thereafter. At present, the pair is trading at 1.2902 with 1.279 seen as the next downside target level. At last week’s close, the pair was quoted at 1.2916.
The European session’s economic calender was empty with no significant market moving data due for release.
However, across the Atlantic, the U.S. new home sales data for June is slated for release in the New York session.