Worries about the Euro-zone financial system jumped today as there was concern that German bank WestLB's future was in doubt. As Dow Jones Newswire reports, the troubled lender was preparing to outline a government-supported restructuring plan before the European Commission's deadline Tuesday, setting the groundwork for breaking up the bank.

From Reuturs: FOREX-WestLB uncertainty knocks euro to 3-wk low

The euro slipped to a three-week low against the dollar on Monday, hit by reports that rescue plans for ailing lender WestLB were under threat, and with euro zone peripheral debt concerns keeping investors on edge.

Aid for WestLB hangs in the balance, a source told Reuters on Monday, as the bank struggles to come up with a rescue deal ahead of presenting a restructuring plan to the European Commission.

The WestLB news doesn't provide a great deal of optimism to the euro at the start of the week, said Jeremy Stretch, currency strategist at CIBC. Structural negatives in the euro zone haven't gone away, and some of those risks are due to the banking sector. WestLB's problems are a reflection of that.

In addition, the Euro was also facing pressure ahead of a meeting of Eurogroup finance ministers Monday afternoon, in which no new developments are expected.

We also saw the ECB dipping back into the sovereign debt market for Euro-zone periphery nations. It bought Portuguese government bonds in the secondary market once again, after yields shot up to almost 7.6% last week.

Investors started demanding higher interest rates to hold weaker euro-area bonds compared with safe-haven German bunds. The yields spreads on Portuguese and Spanish bonds after falling back to end last week were wider again Monday.

As we stand right now, Portugal has not done enough to reassure financial markets that it will not need financial assistance. Some EU member states and the IMF have urged Portugal to accept a bail-out, arguing that a quick decision will limit the size of the aid package.

It's ECB intervention keeping the lid on these yields, and so this is not much different of  a situation than before the hype about adding flexibility to the European Financial Stability Facility.

The EUR/USD extended its decline we had last week, pushing through the 1.35 area.

For more on the EUR/USD pair, check out Technical Update: EUR/USD at the Neckline.

Not too much in terms of fundamental releases. Industrial production in the Euro-zone was down 0.1% in December, the first negative reading in 3 months. However, it did meet expectations.

Overall, we start the week with a distinctive EUR weakness.