True to recent form, the US dollar continued its winning run through the course of last week with European debt concerns remaining the primary stumbling block. This cautious positioning remained the key theme on Friday at the expense of the Euro, Sterling and commodity bloc currencies with Spain and Greece remaining the key elements. Equities from both sides of the Atlantic continued to fall under the weight of general anxiety from Europe with risk barometers the DOW and S&P500 falling 0.60 and 0.74 percent respectively.

The local week ahead holds very little in terms of major event risk with Wednesday Conference Board Leading Index the only mid-tier data point. Key event risk from China this week includes HSBC manufacturing PMI on Thursday.  Amid the constant conjecture over the health economic future of Greece and Spain, growth data from Europe's largest economy will also be a key focus in the week ahead. German Gross Domestic Product is expected to show seasonally adjusted growth of 0.5 percent in the first quarter to represent annual growth of 1.2 percent. The German IFO data series will also be closely watched with Euro-Zone and German PMI also on Thursday's docket.

Across the Atlantic, the health of U.S housing will be under the microscope this week with Existing/New home sales and house price index on the bill. Durable goods orders are expected to rebounded in April after 4.2 percent decline March and the final revision for the University of Michigan consumer confidence gauge is expected to be unchanged at 77.8 in May.

The Australian dollar continued its downward rout on Friday falling to near 6-month lows - briefly falling below the 98-handle before finding moderate support to finish the week at 98.4 US cents. Commodity currencies are holding the world on their shoulders at the moment with unrelenting pressure from European markets prompting a global bid for safety with the perceived safety of the US dollar and Yen the primary winners. While there may be a valid technical argument to suggest the Aussie dollar is due for a short-term reprieve, it's clear the local unit remains at the mercy from feedback from Europe, with further negativity from the region likely to see the Aussie continue to forge lower with 96.5 US cents the next stop before a deeper leg-down is considered. At the time of writing the Australian dollar is buying 98.4 US cents.