The Aussie dollar has come under pressure today coinciding with general weakness across local and Asian equities. Broad-based Euro weakness has contributed to natural weakness across risk currencies with the Aussie, CAD and Kiwi taking another leg down. The Aussie's slipped through last week's lows of 96.2 US cents in the last hour resulting in a swift drop to around 96 US cents with stops squeezed below key support levels - subsequently forging new 2011 lows. Once again we're entering a week where Europe is the key focus and the greenback is looking like the currency of least resistance.
Only days after German Parliament approved broadening the buying power of the European Financial Stability Fund, Finance Minister Wolfgang Schaeuble has ruled out adding to the size of the EFSF which currently stands at 440 billion euro. This represents a major set-up back for investors with many speculating the fund would be increased to over 1 Trillion-Euros. Compounding negativity from the Euro region has been the confirmation Greece will fall short of deficit reduction targets. European finance ministers will begin a two-day meeting Monday with Greece no doubt the primary topic of conversation and their eligibility to receive their next bailout installment to the tune of 8 billion-euros.
Central banks will command the spotlight this week with the RBA, BoE, BoJ and the ECB due to meet on interest rates. Over the US, all eyes will be on Fed Chief Ben Bernanke's Testimony before the Joint Economic committee, with PMI Manufacturing data and the monthly game of roulette that is non-farm payrolls also on the docket. At the time of writing the Aussie dollar is buying 96 US cents.