The euro was predominantly flat against the US dollar despite European finance ministers agreeing to ratify measures discussed at the EU summit last month.
European leaders signed off on the bailout package for Spain yesterday and granted the embattled country an extra year to get its finances under control. However, the implementation of these measures remains to be seen, especially in light of the German court ruling regarding the European bailout fund and whether it is in line with national laws.
A revival in risk appetite, owing to encouraging UK manufacturing figures, temporarily boosted EUR/USD. The Office for National Statistics showed UK manufacturing production rising by 1.2% in May following a contraction of 0.8% in April, while industrial output for the same month gained 1% from a revised decline of 0.4% previously. The data raised hopes for an economic rebound, which in turn depressed the US dollar.
EUR/USD appears to have found some short-term support around $1.22, as traders with shorts on the currency pair have been closing out their positions (buying the euro) around this level.