A global bid for safety dominated proceedings overnight with significant losses across European equities forcing further downside across the risk spectrum. Euro-region dramas remained the primary barometer with concerns over Greece's ability to remain in the Euro-zone the key directive. The bid for safety found market participant's flock to all the likely places with German debt yields falling to records lows in a testament to the sort fear and trepidation in the market place. Fears escalated Tuesday after former Greek PM Lucas Papademos revealed contingency plans are in place in the event of a Greek departure and this theme continued overnight with reports the European Central Bank are assessing the ramifications should Greece fail in its efforts to form government.

Solid losses across US equities earlier in the session were unwound by the close but not before taking a significant slice out of risk currencies with US dollar strength remaining the key theme. The greenback dominated the out-of-favour Euro with price action making a break to the downside of the $1.26-handle. The Euro fell to lows near two-year lows of $US1.2545 before a slight reprieve but remains under pressure below $US1.26-figure. The Australian dollar followed a similar trajectory hitting fresh 6-month lows of 96.89 US cents.

In an effort to find common ground on pro-growth strategies, an informal dinner gathering of European leaders is currently underway however market participants remain sceptical these discussions will yield any immediate results. Although we may see leaders display solidarity and commitment to keep Greece in the union, it may not be enough to promote any sustained positivity across markets - nonetheless, some corners of the market have mustered the courage to return to the market given the chance new policy measures may be agreed upon.

The day ahead will see the focus shift to China with the HSBC Manufacturing PMI due for release. This is clearly the sort of environment that could induce further short-term pressure for risk currencies, with the Australian dollar eyeing the 96.6 US cent region should today's yield uninspiring results. On the flip side, commitment from China to resume pro-growth policy measures may act as a cushion for China-contingent currencies such as the Australian dollar. At the time of writing the Australian dollar is buying 97.5 US cents.