EUR/USD

The euro traded lower against the U.S. dollar Monday, pressured by worries that the upcoming European Union summit will disappoint hopes for progress on solving the euro zone’s debt crisis, while unconfirmed reports of the Greek finance minister tendering his resignation further dampened euro zone sentiment. Single currency sentiment weakened amid growing doubts over whether European leaders will make any progress towards greater fiscal integration and allowing the bloc's rescue funds to buy government debt at a two-day summit meeting due to begin on Thursday. In addition, unconfirmed news of the Greek finance minister resigning further weighed on euro zone sentiment.

GBP/USD

The pound remained moderately lower against the U.S. dollar on Monday, as concerns over the debt crisis in the euro zone continued to weigh on market sentiment despite the release of better-than-expected U.S. economic data. Official data showed that U.S. new home sales surged to a one-year high, indicating that the housing market may be gaining some momentum. The Commerce Department said new home sales rose 7.9% to a seasonally adjusted 369,000 units in May, the highest rate since April 2010 and outstripping expectations for a gain of 0.6% to 346,000. New home sales for April totaled 343,000 units. But market sentiment remained under pressure amid growing doubts over whether European leaders will make any progress towards greater fiscal integration and allowing the bloc's rescue funds to buy government debt at a summit meeting due to begin on Thursday. In the U.K., speculation over the possibility of more easing from the Bank of England continued after BoE policymaker David Miles said earlier that a "substantial" amount of monetary stimulus was needed to shore-up growth in Britain's "stalled" economy. In an interview with the Financial Times, Miles reiterated his support for a GBP50 billion expansion of the central bank’s asset purchase program

USD/JPY

The U.S. dollar was lower against the yen on Monday, as ongoing global growth concerns and worries over the handling of the debt crisis in the euro zone prompted investors to flock to safe haven assets. Safe haven demand was boosted by concerns over the effects of the euro zone’s debt crisis on global growth, following a string of data late last week which indicated weak U.S. manufacturing activity, a shrinking Chinese manufacturing sector and slowing business activity throughout the single currency bloc. In addition, Spain's government was expected to make a formal request for aid for its banking sector later in the day, after reports on Thursday indicated that Madrid would need a rescue package of as much as EUR62 billion. Investors also remained cautious ahead of a European Union summit due to begin later in the week, amid hopes progress on greater fiscal integration and allowing the bloc's rescue funds to buy government debt.

USD/CAD

The U.S. dollar advanced to an almost two-week high against its Canadian counterpart on Monday, as investors favored the safety of the greenback amid doubts over progress on the euro zone’s debt crisis at an upcoming European Union summit. Market sentiment soured amid growing doubts over whether European leaders will make any progress towards greater fiscal integration and allowing the bloc's rescue funds to buy government debt at a summit meeting due to begin on Thursday. Meanwhile, fears that the debt crisis in the euro area is creating a drag on global growth continued to weigh, following a string of data last Thursday which pointed to weak U.S. manufacturing activity, a shrinking Chinese manufacturing sector and slowing business activity across the single currency bloc. The Canadian dollar was also weighed by lower crude oil prices, with crude futures for delivery in August down 1.15% on the New York Mercantile Exchange, to trade at USD78.84 a barrel. Raw materials, including oil account for about half of Canada’s export revenue.

CL2Q

Crude oil futures traded lower during U.S. afternoon hours Monday, falling below USD79-per-barrel prior to bouncing, as doubts over whether an upcoming European Union summit will yield any progress on tackling the region’s debt crisis dampened demand for riskier assets. Persistent fears over a slowdown in global growth and its implications on oil demand further weighed. Market sentiment weakened amid growing skepticism over whether European leaders will make any progress towards greater fiscal integration and allowing the bloc's rescue funds to buy government debt at a summit meeting due to begin on Thursday. Oil traders were also monitoring the path of Tropical Storm Debby as it hovered in the Gulf of Mexico.  The National Hurricane Center reported Debby was gaining strength on Sunday, hitting the northeastern Gulf coast with high winds and heavy rain. The projected path of the 2012 hurricane season’s fourth named storm remained uncertain. Oil drillers including Conoco Phillips and British Petroleum shut about 23% of output in the Gulf of Mexico as a precaution ahead of Tropical Storm Debby. Energy traders track tropical storm activity in the event it disrupts production in the Gulf of Mexico, which is home to 20% of U.S. oil production.

GOLD

Gold futures were mildly higher during U.S. morning trade on Monday, as some safe-haven buying supported the precious metal amid doubts over progress on the euro zone’s debt crisis at an upcoming European Union summit. Gold found some safe-haven support as market sentiment soured amid growing skepticism over whether European leaders will make any progress towards greater fiscal integration and allowing the bloc's rescue funds to buy government debt at a summit meeting due to begin on Thursday. Spain’s government formally requested aid of up to EUR100 billion for its banking sector from its euro zone partners earlier in the day. Spain’s economy minister said the amount should be enough to cover the needs of all banks and provide an additional security buffer. The request came after the results of an independent audit last week indicated that Madrid would need a rescue package of as much as EUR62 billion to bailout its banks. Some bargain buying further supported prices, as markets players returned to the market to seek cheap valuations following last week’s sell-off.