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The continental currency fell against the dollar Wednesday morning on new concerns that Spain's growing sovereign debt issues might cause it to face an EU bank lending freeze, prompting reports that a €250 million package to shore up liquidity was in the works by the IMF, EU, and—surprisingly reported, but later denied—the US Treasury.
Coupled with global stocks faltering after US housing starts dropped more than expected in May to a five-month low, the euro fell .03% to $1.2289. Safe-haven assets like bonds and gold were the order of the day as US homebuilding numbers suffered from the expiration of a homebuyer tax credit that had buoyed—some say artificially— construction and optimism over the past two months. "The housing start numbers weren't great, and you have the concerns about Spain and other euro zone countries' debt situation," said Kurt Brunner, portfolio manager at Swarthmore Group in Philadelphia.
