Anxiety about the upcoming European bank stress test results weighed on the euro against the US dollar this morning, even though regulators said the banks undergoing the tests will unveil the details of the stress tests when they release their results on Friday.

According to the Committee of European Banking Supervisors, banks will publish their estimated Tier 1 Capital Ratios under a benchmark for 2011. The Tier 1 Capital Ratio  gauges a bank’s financial strength. Banks will also be tested under an adverse economic scenario as well as a ‘sovereign shock’. However, the reaction remained mixed, with Credit Agricole taking the view that the euro has already priced in any good news that could come out of the bank stress test on Friday. Meanwhile, Andrew Brenner of Guggenheim Securities said the tests looked to be the ‘easiest test in the world to pass’. Strong earnings reports from Apple and successful sales of Irish, Spanish and Greek bills helped to revive confidence in Eurozone assets, but most investors are awaiting the semi-annual testimony from Federal Reserve Chairman Ben Bernanke. His statement may, according to Reuters, boost speculation that the US may consider more fiscal stimulus. Elsewhere, Lloyds Banking Group believes the euro may fall as low as $1.2750 on thin trading before the publication of the European bank stress test results. ‘Commitment is unlikely to overwhelm as volumes recede ahead of Friday’s stress test results,’ wrote Kenneth Broux in a note today. ‘We are not huge fans of euro-dollar rally over $1.30 and target a return to the area around $1.2750