Asian session: The euro traded 0.3 percent from a two-week low

The euro traded 0.3 percent from a two-week low against the dollar amid concern that a European Union summit this week will fail to produce decisive measures to end the currency bloc’s debt crisis. The two-day EU summit in Brussels starting June 28 is the first meeting of European leaders since Greek parliamentary elections on June 17 that saw victories for pro-bailout parties. France and Italy are urging Germany to take decisive action to end the debt crisis, now in its third year.

The 17-nation euro held onto a drop from yesterday versus the pound before Spain and Italy sell debt today as fiscal contagion from Greece risks an increase in borrowing costs to unsustainable levels. Italy is scheduled to sell inflation-linked securities maturing in September 2016 and September 2026 today, along with as much as 3 billion euros ($3.8 billion) of May 2014 zero- coupon notes. Spain will offer three- and six-month bills.

Moody’s Investors Service downgraded 28 Spanish banks yesterday, citing the country’s sovereign debt and rising real estate losses. At least a dozen Spanish lenders were lowered to junk status, Moody’s said yesterday in a statement. The ratings company downgraded six banks by four levels and 10 by three grades with the rest getting one- and two-tier declines.

Demand for the U.S. currency as a refuge was supported as Asian stocks extended global losses.

EUR / USD: during the Asian session the pair traded in range $1.2495-$1.2525.

GBP / USD: during the Asian session the pair rose to yesterday's high.

USD / JPY: during the Asian session the pair fell to yesterday's low.

European data for Tuesday starts at 0645GMT with consumer confidence data from France along with housing starts/permits data. UK data at 0830GMT sees the Public Finances data for May. Also in the UK, from 0900GMT, a UK Treasury Select Committee Inflation Report has hearings with members of the Bank of England MPC, including Broadbent, Dale, King and Miles. US data continues at 1300GMT with the latest S&P/Case-Shiller Home Price Index. At 1400GMT, the Conference Board's index of consumer confidence is expected to fall further to a reading of 63.0 in June after falling to 64.9 in May. The Richmond Fed Manufacturing Index is also due at the  same time, and is followed at 1430GMT by the Dallas Fed Services Outlook Survey.