The euro slumped today on the concerns that the health of the European banks would deteriorate as they hold the government debts, damping the outlook for Europe’s economy.
The Wall Street Journal said that the stress tests of the major European banks underestimated some holdings of the government debt. The European Union performed the stress test of the banks in July. According to the report of the Journal, some banks excluded debt of the certain countries from their totals and others reduced amounts of their short positions in the account.
EUR/USD tumbled from 1.2874 to 1.2754 as of 11:13 GMT today.
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