Euro falls as risk appetite wanes

The euro fell by 0.5 cents (0.36%) against the US dollar yesterday to finish the day at $1.4031.

• In early trading yesterday the single currency first strengthened then weakened against the dollar, after data released in the eurozone knocked early risk appetite in the market.
  
• Figures showed loans to eurozone businesses and households slowed to 3.7% in May from a year ago, well below forecasts of 4.6% and the previous month’s reading of 4.9%. This underscored the urgent need for the European Central Bank’s 442 billion euro liquidity injection, announced last week, to take effect soon.
  
• Poor US consumer confidence index data released mid-afternoon also hit risk appetite in the market, showing a drop in June to 49.3 from a downwardly revised 54.8 in May. This prompted investors to buy back into the perceived safety of the greenback.
  
• In trading so far today the single currency has risen slightly against the greenback, as traders continue to pick over yesterday’s economic releases.
  
• There are no major announcements due in the eurozone today, whilst in the US ADP Non-Farm Employment Change figures are out at 13.15 BST, followed by ISM Manufacturing PMI and Pending Home Sales at 15.00 BST.