The single euro currency appeared bleary-eyed as the trading week got underway. An immediate slump leaves the onlooker with the impression that it may well have fallen out of the wrong side of the bed after a well-deserved nap after a four-year low last week. Further anecdotal evidence that the financial crisis continues to wash up over European shores arrived over the weekend as the Spanish central bank seized controller over a lender struggling to breathe under the weight of soured property loans. Dealers reversed last week’s mildly bullish sentiment towards the euro and have once again looked right through the trillion-dollar rescue package and concluded that the euro needs to prove it can take another drubbing.


Euro - The euro slumped from $1.2565 down to $1.2365 all too easily as investors digested the news. However, with a property boom over the course of the last decade fit to house the German nation, it should be no surprise at this stage of the recession to hear the ricochet of the shrapnel from the implosion of the property market. Although the easy trade right now is the downside for the euro, key to dealers today will be whether in the first half of the week the euro tests the $1.2144 low of last week.

British pound - The weakness in the euro is unsurprisingly taking a negative toll on the pound, which earlier was higher after the British Chancellor George Osborne, unveiled spending cuts amounting to £6 billion. The new government earlier said it would deliver an emergency budget within six weeks of taking power and has also stated that it's come across bad fiscal policy decisions in the dying days of the Labour administration. The pound could not. However, remain above $1.45 very long this morning and has subsequently slumped to $1.4361 as the euro sinks. The pound rose as the euro fell on the cross rate where one euro buys 86.28 pennies.

Japanese yen -The Japanese yen eased against the dollar to stand at ¥90.26 as investors considered the threat of a new wave of asset selling around the world. Chinese stocks rose as some speculation swirled that Chinese authorities might refrain from further measures aimed at cooling its domestic economy. That prospect was a breath of fresh air for the region although the natural question to ask is whether this represents a reprieve.

Aussie dollar - An 8.4% jump in the number of new autos sold during April in Australia was not enough to keep the Aussie dollar afloat. The new week has suddenly dulled investors' appetite for riskier offerings and the unit fell to as low as 81.86 U.S. cents overnight. The fear has once again resumed that European dust clouds hampering its economic performance will migrate to other regions of the world. The Aussie has battled its way back to 82.85 cents in European trading.

Canadian dollar - The Canadian dollar remains unchanged this morning at around 94.31 U.S. cents. The central bank meets next week to determine whether or not the recent shock to global financial markets should prevent it from embarking on a series of interest rate increases.