The euro accelerates its decline as the EU Summit approaches. The single currency tumbles against major counterparts as the sovereign debt problem in Greece is at crossroads. Selloff in the euro pressures gold which leads declines in other precious metals. Oil prices also weaken, reflecting dismal inventory data as well as macroeconomic uncertainty.

Financial ministers in the EU will meet on March 25/26 with the most critical issue being financial support to Greece. News reported that both German and France now agree to involve the IMF in arranging a package to help Greece over the heavy debts. (Potential) involvement of the IMF hurts the euro as it signals that the European currency union is incapable of handling its own troubles. While the kinds of assistance that IMF will offer remain unknown, it's likely that the Fund would impose strict economic plans for Greece so as to ensure it can repay the loans. The market also worries this would cause Greece to temporarily exit the Eurozone.

France and many EU countries have strongly opposed an IMF involvement while Germany Chancellor Angela Merkel suggested it. Should both France and Germany now reach an agreement, it highly increases the chance that other EU countries will agree.

The deficit problem is contagious to other peripheral European countries and Fitch Ratings cut Portugal's credit rating to AA-, citing worries on the country's deteriorating public finance. The agency also put Portugal in 'negative' outlook meaning further downgrade is likely.

The euro slides to 1.337, the lowest level since May 2009, against the dollar. It also drops against the yen and the pound. Against Swiss franc, the single currency plummets to a record low on speculations that the SNB has given up currency intervention.

Gold falls to 1093.4 as investors forgo the yellow metal's safe haven property and turn to the dollar. Silver drops in tandem, losing -1.9% to 16.7.

Crude oil dives to 80.35, losing more than 1 dollar from yesterday's close as investors react to the huge stockbuilds (+7.8 mmb) in crude oil, according to API. The market anticipates the US Energy Department will report increase in crude inventory but draws in oil product inventories.

On the data front, PMIs in the Eurozone beat market expectations but industrial new orders surprisingly contracted in January.

March Manufacturing and services PMIs in the 16-nation region improved to 56.3 (consensus: 52) and 53.7 (consensus: 52) from 54.2 and 51.8 respectively. The readings indicates economy is recovering in the Eurozone. However, industrial new orders contracted -2% m/m in January after rising +0.8% in the prior month. We may see if better figures will be released in coming months.