The Euro weakened on Monday against most of the major currencies. The Euro dropped against the Dollar and the Pound and saw a 100 pips loss against the Yen, as the EUR/JPY pair fell to the 111.20 level.
The Euro dropped yesterday on speculations that tests that are made to demonstrate the resilience of the Euro-Zone's banking system will fail to ease investors. The biggest concerns regarding the stress tests results appear to be about the transparency of the data. Investors fear that they will not receive the details that they're looking for. This boots the already high uncertainty that exists in the markets, and turns investors to look for safer assets, such as the Dollar and the Yen. The main issue continues to evolve around the Euro-Zone's debt problems. It seems that until investors will receive solid data to believe that economies such as Greece and Spain will manage to recover, the Euro might see further bearishness.
As for today, a batch of data is expected from the Euro-Zone. The most intriguing economic publications will probably be the German ZEW Economic Sentiment which is scheduled for 09:00 GMT. It is a survey that asks German institutional investors to rate the next 6-month economic outlook for Germany. Analysts have forecasted that the German Economic Sentiment has dropped in June to 25.2 from 28.7 on May. If the actual result will be similar, this will mark the third consecutive drop of this survey, and has potential to weaken the Euro further.