Stocks lose grip on gains, euro scales heights

The euro reached a five-year peak against the yen and a six-week high against the dollar on Tuesday, as focus intensified on the dwindling level of spare cash in the euro zone’s banking system and the ECB’s apparent lack of concern. Stocks consolidated some of their gains of the last two days as caution also ticked-up before the Federal Reserve’s meeting next week amid talk of a tentative scaling-back of its stimulus from some of its policymakers. Investors were poised for a busy day of data on some of the countries still struggling in the euro zone, as well as some interesting money market operations at the ECB where liquidity levels are now the tightest in two years. “It is hard to say the euro will weaken unless the ECB does something,” said Laurent Fransolet, an interest rate strategist at Barclays in London.

    

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