Euro, and specifically Greek, worries dominated markets overnight once again. Global equities were weaker across the board, with indices in both Asia and Europe off 1-2%. In government debt markets, demonstrating its status as the most reliable euro zone government, Germany issued its first ever near-zero-return two-year instruments. This highlights that, as fear and uncertainty grow, investors begin to seek the reliable preservation of capital ahead of unreliable returns. Oil was softer overnight on hopes of a deal between Iran and the United Nations that could see sanctions eased, which alleviated supply-side disruption concerns. Gold was also softer overnight as demand concerns in India, the world's largest gold consumer, weighed.

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The common currency was punished overnight as sentiment regarding Greece turned from bad to worse. Former Greek Prime Minister Papademos was quoted in the Dow Jones as saying Greece had to either accept the strict austerity plan, or face an exit from the euro. He also hinted that plans for a Greek exit are being formulated. Elsewhere in Europe, EU leaders are in an all-day economic summit discussing ways to boost economic growth and calm fears in the market. However, expectations for results are limited given that Germany still remains strongly opposed to joint euro-denominated bonds.

Off the Charts, the last 24 hours or so have seen the EURUSD test 1.2600, its lowest level since August of 2010. A bearish break below 1.2624, the previous 2012 low, opens up a lot of downside space given the lack of recent historical data points. The EURGBP is hovering around the 0.8000 handle this morning. The pair is in the midst of a technical correction after hitting a multi-year low last week. Given the kinds of headlines we're seeing, it's tough to be optimistic about the euro.

The USD has been the primary benefactor of investors pulling funds out of the common currency. The Dollar Index touched a 20-month high overnight as investors sought out the stability that the Greenback offers. The Big Dollar even advanced to a four-month high against the Swiss franc, which despite being a so called safe haven currency has been under cross-currency pressure due to the EURCHF cap instituted by the Swiss National Bank at 1.2000. The other currency gaining on euro headlines is the Japanese yen, which seems to have shrugged off its recent ratings downgrade, and is stronger on the day following no new stimulus being announced at the Bank of Japan press conference overnight.

Loonie Softer on Day; Retail Sales Don't Help

Turning to North America, Canadian Retail Sales figures for the month of March were released this morning. While the headline number was generally in line with expectations, the core number, which excludes automobiles, was a little under the expected result. The Loonie was broadly softer overnight on Europe concerns, and this morning's data simply added to the list of reasons for traders to be short the Loonie.

The USDCAD hit its session high just south of 1.0250 following the Retail Sales data. This area looks to offer some historical resistance, after which 1.0320 and 1.0425 should contain near-term action. On the back of headlines, the euro was one of the few currencies that the Loonie outperformed. EURCAD fell overnight, testing 1.2900, but was unable to break through, and has since pulled back.

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