European session: the euro still under pressure

The euro fell  as Spanish and Italian borrowing costs rose at debt sales amid concern a European Union summit this week will fail to solve the sovereign debt crisis.

The greenback weakened against the yen before a report economists said will show U.S. consumer confidence fell for a fourth month in June.

Italy sold 2.99 billion euros of zero-coupon notes due in May 2014 today at a yield of 4.71%, more than the 4.04% paid on May 28. Spain auctioned 3.08 billion euros of bills, with three-month securities yielding 2.36%, compared with 0.85% at the previous auction.

Spain formally requested a bailout for its banks yesterday, and Cyprus also sought a financial lifeline from the euro area’s firewall funds, becoming the fourth and fifth of the currency union’s 17 member states to require external aid.

Moody’s Investors Service downgraded 28 Spanish banks yesterday, citing the country’s sovereign debt and rising real estate losses.

‘Disappointing Outcome’

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.

EUR/USD: during the European session the pair consolidated under $1.2470 - $1.2530.

GBP/USD: pair showed high at $ 1.5650, but later retreated.

USD/JPY: pair fell in ​​Y79.30 area.

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.