The lack of confidence of an European fiscal restructure has continued to be a common theme overnight, with even with the constant promises and proposals from Nation states and international funding bodies failing to inspire inspiration to the broader market place.                                 

With Italian 5 year bonds selling at 6.47% yields at auction overnight versus German 2 year bonds at 0.29% the lack of confidence was apparent. The USD dollar is the destination for those maintaining the risk-averse line, especially treasuries, with US dollar dominated assets copping a further battering overnight to add to losses already sustained this week. 

The USD dollar index furthered its gains up at 80.73 not touching that high since January this year as major indices and bourses took significant hits with the Cac40 down 3.33, FTSE down 2.25 and the Dow Jones down 1.15%.  Both the Australian dollar and the Euro breaking through key levels with the Euro down below 1.30USD and the Australian through parity and going below 99 US cents on two occasions in the US session. 

The United Kingdom economy continues to be dragged down by ongoing issues in Europe with Unemployment data overnight remaining stubbornly high at 8.3%, the positive side was the jobless claims rose less than economists had expected.  The Pound did slip against the US dollar but made strong gains against the Euro with the EURGBP pair falling from 1.30500 down to a session low of 1.29476 before recovering 30 pips to the end of the US session.  With the latest round of quantitative easing finishing in February, it now more of a predication of how much more is needed and for how long it will need to be maintained through 2012 to help the economy rebound.

The Australian dollar stabilised around 99 US cents at the tail end of the US session, but remains vulnerable to further downside leading into what's expected to be a negative day in regional markets. The day ahead will see the release of consumer inflation expectations, new car sales and RBA FX transactions. At the time of writing the Australian dollar is at 99.1 US cents.