The euro fell to a fresh four-year low on June 1 after the European Central Bank warned the region's banks may face a new wave of losses, and U.S. stocks plunged as the government launched a criminal probe into BP's massive oil spill in the Gulf of Mexico.
U.S. Treasury bond prices rose as fears of hefty writedowns by European banks sparked new worries about global economic recovery and unleashed demand for safe-haven assets such as government debt and gold.
Risky assets such as the euro and stocks rose earlier in the day following better-than-expected U.S. construction and manufacturing data. They gave up gains on fears the euro zone's debt crisis would spread into its banking system.
The ECB cautioned on May 31 that euro zone banks could face a "second wave" of potential loan losses totaling 195 billion euros ($239 billion) over the next 19 months due to the financial crisis.
U.S. and UK financial markets were closed on May 31 for national holidays.
VOVNews/Reuters
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