Risk aversion is undoubtedly the order of the day across global currencies today. The Aussie dollar is losing considerable ground against major counterparts, with the AUDJPY pair leading the charge lower and AUDUSD down near 1% on the day. This theme of weakness has been carried over from Friday's off shore session which saw the balance of risk err to the side of caution.

Fears that Greece will fall short of the fiscal targets needed to receive their next tranche of the bailout funds roiled markets on Friday, sending equities from Europe to the U.S down sharply. To add fuel to the fire senior ECB official Juergen Stark resigned in what markets interpreted as a protest to the central banks role in purchasing the bonds of Euro-zone countries. Although the official reason was for personal reasons his resignation serves to highlight the vast differences between German and ECB policy, given Stark - a German native, is perceived to side with Germany's hard-line stance on countries who require financial support.  

Over the weekend the G7 concluded their 2-day meeting in Marseille, France. The group once again pledged a coordinated effort to restore economic stability, but offered no specific details or path on how they plan to resuscitate growth and halt the downward growth trajectory of the world's largest economies. Clearly markets have lost faith in the ability of policy makers to stem the seemingly never-ending bout of fear sweeping the globe. With respect to the complexities of building a bridge between the respective policy settings of the world's largest countries, the ensuing statement appears to be another 'all taste and no real nourishment' G7 communication. Markets are in sell mode and a pledge of unity is doing little to stem the decidedly risk-off tone.

The aforementioned resignation of the ECB's Stark in conjunction with fears that Greece is on its last legs has manifested negatively across Euro pair with EURUSD now convincingly below 1.40 the figure. The Euro has continued its downward rout this morning with price action settling lower below the 1.36 handle. EURJPY is at a decade lows but traders have not yet tested the resolve of the Swiss National Bank with the EURCHF pair still above the 1.20 handle.

Better than expected Chinese trade data over the weekend has largely failed to negate the risk averse environment passed on from European/U.S. markets on Friday. Regional stocks are getting hit hard in-turn promoting further weakness from the Aussie dollar. This is a particularly tough environment for the local unit and one would consider a continuance or escalation of this theme from Europe path the way for further downside. We appeared to have some intra-day support just below 103.6 US cents - a break of these levels should see 103.15 cents present temporary support. At the time of writing the A$ is buying 103.8 US cents.