The new week brought new woes for the single European currency as it slid to fresh four year lows as confidence in the Euro Zone continued to wane despite last week's rescue package valued near $1 Trillion dollars. German Chancellor Angela Merkel was even quoted over the weekend as saying that the rescue package has only bought the EU time. Many traders believe that the severe austerity programs that are being implemented across the Euro Zone will cripple growth while the ECB turns on the Euro printing press in order to satisfy quantitative easing programs under the new rescue package. The early session EUR/USD high of 1.2370 very quickly disappeared to a 2006 low of 1.2233 in a wild stop driven move that pulled the rug out from risk appetite.

As the Euro fell, so did the Pound, aided by a newspaper article quoting the new government as saying that the previous Labour Party had used a scorched earth policy with debts that could be worth billions when all is said and done. GBP/USD fell from 1.4540 to eventually touch a 1.4250 bottom on the selloff. GBP/JPY fared no better as it saw a drop of almost 350 pips from Friday's 134.50 close to today's morning lows near 131.10. EUR/JPY lost value from 114.25 to just under the 112.50 level as risk appetite evaporated. The over 2% losses in the Nikkei and Kospi surely didn't help matters with the yen crosses. In Japan, softer results in core machinery orders of 5.4% as opposed to the 5.8% projected constituted the only meaningful data for the day.

With the SNB supposedly on the bid near 1.4002 in EUR/CHF, the pair crawled along between 1.4003 and 1.4006 levels for the entire session. The Australian dollar was victimized by the dollar, as the currency fell from 0.8860 to 0.8720 and the NZD/USD slipped from 0.7070 to 0.6990 as oil prices were slashed due to the notion that demand will suffer with less growth.

With US equity futures currently looking horrible and the EUR/USD clearly treading on a very slippery slope, expect the upcoming sessions in London, and most certainly the US to be volatile to say the very least.

Upcoming Economic Data Releases (London Session)                            prior      expected

None