The euro declined against its major rivals in early trading on Tuesday as European stocks slumped on fresh worries of the health of European Banking systems on doubts over Europe's "stress tests" on major banks.
In July, the results of the stress tests showed all but seven European lenders out of 91 banks were strong enough to withstand future financial crises.
But a report in the Wall Street Journal on Tuesday showed the "stress tests" of the strength of major banks understated some lenders' holdings of potentially risky government debt.
Further, a report from the Association of German Banks estimated that Germany's ten biggest lenders, including Deutsche Bank AG and Commerzbank AG, will need an additional EUR 105 billion in fresh capital to meet estimated new Tier 1 capital ratios.
U.K.'s FTSE 100 Index is currently down 0.79%, France's CAC 40 is trading 1.07% lower and Germany's DAX is presently down 0.75%.
The common currency depreciated by more than 0.8 percent to reach a 4-day low of 0.8299 against the pound around 3:20 am ET and the pair held steady thereafter. The next downside target for the euro-pound pair is seen around the 0.8280 level. The pair is presently quoted at 0.8303.
In the U.K., retail sales were up 1% compared to the same period a year ago on a like-for-like basis in August, the British Retail Consortium said today. Total sales increased 2.8%.
Against the Swiss franc, the single currency slipped to a 6-day low of 1.2906 around 4:15 am ET and a move below its August 31st low of 1.2853 could set its weakest level in record. The euro-franc pair is presently quoted at 1.2910.
Switzerland's unemployment rate was unchanged at 3.6% in August as expected, while the number of unemployed persons increased modestly, official figures showed today.
The State Secretariat for Economic Affairs said around 142,900 were registered unemployed at the end of August, nearly 550 more than July. Compared to the same month a year ago, the number of unemployed had fallen by around 8,000 persons.
The European currency reached a 6-day low of 107.03 against the Japanese yen before leveling off around 4:20 am ET. The euro-yen pair is presently worth 107.18 with 106.0 seen as the next likely support level.
The policy board of the Bank of Japan, led by Governor Masaaki Shirakawa decided to leave the uncollateralized overnight call rate unchanged at 0.10% and pledged to maintain an extremely accommodative financial environment. Rates have been frozen at their record low since December 2008.
The euro also slipped to a 6-day low of 1.2751 against the US dollar by 4:20 am ET and the pair moved sideways thereafter. The next downside target level for the euro-greenback pair is seen at 1.2730. The pair is presently trading at 1.2762.
Looking ahead, Germany's Federal Ministry of Economics and Technology is expected to release factory orders data for July at 6:00 am ET.
Factory orders are expected to rise 20.6% annually, following a 24.6% increase in June. Month-on-month, factory orders are estimated to rise only 0.5%.
There are no major economic data due out from the North American session today.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.