Asian session: The euro surged

The euro surged the most this year after European leaders eased terms on loans to Spanish banks, taking a step to resolve the region’s debt crisis. EU leaders met in Brussels yesterday and today to discuss measures to stem a debt crisis that’s spurred five euro members to seek international bailouts. Earlier this month, Spain agreed to take a rescue loan of as much as 100 billion euros ($126 billion) to help recapitalize its banking sector.

Spain’s 10-year bond yields climbed to a euro-lifetime high of 7.29 percent on June 18, surpassing the 7 percent level that spurred Greece, Ireland and Portugal to seek bailouts.

The 17-nation euro rallied against the yen as European Union President Herman Van Rompuy said officials meeting in Brussels agreed to drop the condition that emergency loans to Spanish banks give their governments preferred creditor status.

Japan’s currency gained earlier amid speculation that Europe’s debt crisis will damp global growth, supporting demand for refuge assets. In Japan, government reports today showed the nation’s industrial production slid 3.1 percent in May from April, the biggest decline since March 2011, and consumer prices declined 0.1 percent last month.

EUR / USD: during the Asian session the pair rose above the $1.2600.

GBP / USD: during the Asian session the pair rose to weekly highs above $1.5600.

USD / JPY: during the Asian session the pair dropped, updating weekly low.

The UK house price index from the Nationwide is released at 0600GMT. UK data continues at 0830GMT with the final reading of Q1 GDP data. US data continues with the weekly EIA Natural Gas Storage data at 1430GMT, followed at 1500GMT by Kansas City Fed Production for June. US speakers start at 1530GMT with Cleveland Fed President Sandra Pianalto. At 1600GMT, Dallas Fed President Richard Fisher participates in moderated discussions at the 2012 Aspen Ideas Festival in Aspen, Colorado. Back in the UK, at 1700GMT, Bank of England MPC member Weale makes remarks at Queen Mary University.