The Euro slipped to the lowest level in over two weeks against the U.S. Dollar as remarks by the German Chancellor, Angela Merkel, dampened expectations that the E.U. summit will produce the positive results needed to stem the debt crisis. According to reports, the Chancellor has indicated that “joint Euro bonds” aren’t the answer to achieving fiscal integration. The shared currency pared gains versus the Yen following another Italian bond sale during which borrowing costs rose. Italy auctioned 9 billion Euros worth of 185-day bills at a yield of 2.957%.
Other foreign currency news showed a decline of the British Pound against the majority of its counterparts in response to a release which confirmed that mortgage approvals fell the most in more than 12 months. Official data revealed that the number of approved mortgage loans dipped 5.8% in May, thereby supporting speculation that the Bank of England may implement further stimulus.
In the U.S., Durable Goods Orders increased 1.1 percent in May, setting worried investors at ease. Furthermore, the number of Americans signing contracts to purchase existing homes rose, leading market investors to assume the world’s biggest economy is not faltering.
The Canadian Dollar weakened against most of its free Forex peers in anticipation of the European two-day summit, which is set to begin today. The Loonie slumped against commodity-linked currencies on the prospect that a slowdown in global growth will stop the Bank of Canada from increasing the interest rate.
Lastly, New Zealand’s Dollar dipped versus the greenback as economic calendar data indicated May’s trade deficit was the widest in over 2 years.