Overall: Currencies were in pure risk-aversion mode right from the open as investors fled equity markets amid renewed fears over the banking and auto sectors and indications this week's meeting of leaders from the Group of 20 nations won't produce much in the way of specific measures designed to promote global growth at their London meeting on Thursday.

The key take here for traders is that although the relationship between investors' risk appetite and movements in the currencies has diminished somewhat in recent months, the dollar and yen both continue to find support during periods of financial turmoil.

The dollar was also helped after China's ambassador to the U.K., Fu Ying, told the BBC that recent comments by Chinese central-bank Governor Zhou Xiaochuan calling for a new global reserve currency were meant as a contribution to an old debate.

It has been a long debate in the world. There's nothing new, she said. And China is not calling for a replacement [of the dollar]. It is an article written by the governor of the central bank on his bank's Web site. I think he's joining the debate.

The Euro (Eur/Usd) fell as S&P futures and global equity markets weakened, and the pair extended losses after the European Commission reported that its monthly gauge of economic sentiment in the 16-nation euro zone fell to 64.6 in March from 65.3 in February, marking the lowest level since the survey began in 1985. Support in N.Y. was established at 1.3110, near the 50% retrace of the rally which began on Mar. 4.

Additionally, consumer confidence in the Euro-area fell to -34, the lowest read since the index first started. The very poor read points to a very clear contraction in the Euro-area. The last time the euro-area consumer confidence report was above the zero benchmark, pointing to an optimistic feeling among consumers, was at the end of 2000. In addition, almost every indicator gauging the overall sentiment in the Euro-area dropped to a record low, or close to it.

The Pound (Gbp/Usd) was hurt by the risk-aversion tone and after the Confederation of British Industry said today in a report that U.K. financial-services companies may cut 1.4% of the industry’s workforce in the second quarter as business confidence declines. Government bonds gained as the Bank of England prepared to buy 2.5 billion pounds of gilts today as part of its quantitative-easing plan. The pair found support on 1.4110, close to the 68.2% retrace of the rally which started on Mar. 11.

Net lending to individuals increased slightly in February. The number came in at £1.3B, as analysts’ expected. The number released for the month of January was also revised higher, to £1.2B. At the same time, the report showed that the number of loans approved for home purchase rose in February, to 38K.

The Aussie (Aud/Usd) got hit with the other higher-yielders on the risk-aversion play, but traders remain bullish overall. Bloomberg found that options to buy the Australian dollar in the next month cost as much as 0.5975 percentage point more than contracts to sell on March 24, the most since October 2003. One thing to remember about information like this however; all those traders holding longs (via call options) will need to cover their positions should the dollar continue its recent gains, which could lead to extended downward moves on the pair and an increased average daily trading range.

New home sales have increased by 3.9 percent in February. This is the second consecutive monthly increase according to the survey that is published by the Housing Industry Association in Australia. Meanwhile, pre-contract sales of apartments and homes fell for a fifth consecutive month as a result of leery investors who are concerned that the credit crunch may constrain activity.

The Cad (Usd/Cad) traded between the 50 and the 100-day simple moving averages in the overnight session. The cad opened near the 100-day SMA, the resistance area of the last few days. Since then, the pair rose 100 pips until it hit the 50-day SMA and the 1.2500 area. The pair continued higher in N.Y. on the risk-aversion bid and as crude fell nearly $4 on the day, reaching its highest level since Mar. 18.

The Swissy (Usd/Chf) moved strong during the first few minutes of the Asian session, but the pair lost some of its steam soon after. The swissy fell 50 pips from the Sunday open, closing the weekend gap, but then rose again during the European session and continued higher in N.Y, completing a third day of gains off the support established on 1.1150.

The Yen (Usd/Yen) plunged 190 pips during the overnight session. The pair broke with ease below the 20-day simple moving average, and at the same time below the 97.00 support level. The pair has found repeated resistance at the 50% retrace (98.83 area) of the fall from the Aug. 15 2008 high.

Industrial production for February has risen slightly from the lows achieved in the previous month. Economists had been expecting a -9.1 percent decline when in fact the report was released slightly worse off, at -9.4 percent for the month of February. The index is still off by 38.7 percent from one year ago. The industries which contributed to the decline were transport equipment, general machinery, and electrical machinery.