The euro came under modest pressure on Wednesday ahead of the highly-anticipated results of the European Union’s stress tests on major banks.
After a trio of successful bond offerings in Ireland, Greece and Spain, today’s disappointing auctions raised renewed concerns about the region’s sovereign debt problems.
The German government failed to sell all of the 4 billion euros of 30-year securities it offered. Yesterday, the Hungarian government raised 10 billion forint less than was planned at a sale of Treasury bills.
The euro slipped to $1.2790 versus the dollar, falling further from a two-month peak above $1.30. Back in June, the euro dropped to a 4-year low of 1.1805 before stabilizing.
Overall mortgage activity rose last week in the United States, as extraordinarily low rates drove refinancing applications to their highest level in more than a year.
New purchase applications rose for the first time since mid-June.
The euro edged lower versus the yen after a week-long run of choppy trading. The pair eased below Y111.50, moving back toward an 8-year low of 107.30.
A total of 91 banks across Europe are being tested to assess whether they will be able to withstand future shocks in the financial sector. The results of the stress test will be published on July 23.