European session:

The euro slumped to a record low against the Swiss franc amid deepening concern Europe’s sovereign-debt crisis will worsen, reducing the appeal of holding the region’s assets.
S&P last week cut Italy’s credit-rating outlook to negative from stable, citing slowing economic growth and “diminished” prospects for a reduction of government debt. Fitch Ratings on May 20 lowered Greece’s long-term debt ranking to B+, four notches below investment grade, and said a voluntary extension of the nation’s bond maturities would be “a default event.”
“There’s a risk-aversive mood in the market, spurred by uncertainty about the European debt crisis,” said Toshiya Yamauchi, a senior currency analyst in Tokyo at Ueda Harlow Ltd., which provides foreign-exchange margin-trading services. “Concerns about a slowdown in the global economic recovery are also leading selling of the Aussie and kiwi.”
The yen gained versus all but two of its 16 most-traded peers. Spain’s Socialist party suffered its worst electoral defeat in more than 30 years and Standard & Poor’s on May 20 said it may lower Italy’s credit rating. The Dollar Index climbed to a nine-week high as a Chinese manufacturing index fell to its lowest level in 10 months, boosting demand for the American currency as a haven amid concern the global economic recovery will sputter.
The British pound climbed against the euro as Bank of England Chief Economist Spencer Dale said that monetary policy makers should boost interest rates even if Britain’s economic recovery isn’t yet guaranteed.
“I’m not at all confident that the recovery has taken hold and will definitely power away,” Dale said in an interview with the Financial Times published May 21 in London. “However, I’m even more worried about what’s going on in terms of inflation.”