The euro has come back from Friday's two-month highs against the US dollar as investors locked in gains ahead of the US earnings season.

Last week's highs were reached on tracking a broad rally in equities, rather than on speculation that the European bank stress test would not uncover any hidden surprises in the euro banking system. Officials are meeting in Brussels later this afternoon to discuss the level of detail that will be disclosed regarding the bank stress tests, which have been earmarked for release on 23 July. There is a lot riding on the tests to restore confidence in the financial system in a similar way the US bank stress tests conducted following the Lehman Brothers collapse appeased US investors. The amount of details disclosed will go a long way towards achieving this result, so depending on the outcome of this afternoon's meeting, we could see some significant swings in the euro. Until then, investors will remain cautious ahead of the start of the US earnings season which is likely to weigh on EUR/USD.