A string of less than inspiring manufacturing releases put a negative slant on proceedings overnight with PMI numbers from both sides of the Atlantic promoting global slow-down concerns. The latest round of PMI data from Markit Economics showed German manufacturing contracted at the fastest pace in 3-years. German PMI fell to an index level of 45 in June from a previous 45.2, but slightly higher than estimates of 44.7. Unsurprisingly Euro-Zone Manufacturing PMI also remained firmly in contraction territory, while the latest official unemployment data showed a new Euro-era high of 11.1 percent in May from a previous 11 percent. The ISM manufacturing print in the U.S followed a similar theme with a surprise fall to 49.7 from a previous 53.5. Economists expected a moderate decline to 52. A reading below the '50' level suggests the manufacturing secto is in contraction. A separate report from Markit Economics was more positive showing manufacturing PMI slipped lower to 52.5 in June against the preliminary read of 52.9.

While U.S stocks failed to maintain the positive lead set by European markets, the premise of further easing initiatives from the Federal Reserve kept markets from deep losses. On balance, we've seen some encouraging moves across the risk spectrum but the euphoria displayed after the EU summit has now subsided with market participants back to the reality of interpreting the latest economic data points.

After peaking at highs just shy of US$1.27-figure in the wake of the EU Summit, the Euro has maintained a controlled decline with the pair displaying supportive behavior around overnight lows of US$1.2567. Meanwhile, the shared currency continues to be outpaced by its risk counterparts with the Aussie, Kiwi, CAD and Sterling leading the charge higher. The Australian dollar remained supported with price action moving to 2-month highs of 102.78 US cents.

The RBA's policy meeting is the highlight of the local session and will undoubtedly govern the Aussie dollar from a short-term perspective. All signs suggest the RBA will hold a steady course understand the effects of previous easing, in addition to tentative signs of stability from the Euro region. The release of June's policy meeting minutes showed Stevens and Co remain cautious given the negative shock-waves resonating from abroad, in particular Europe. Nevertheless, after a 50bps cut to the official cash rate in May, the minutes showed the board's decision to slice a further 25bps was finely balanced given little in the way of new information suggesting significant weakening locally, while also taking into account the need assess previous policy adjustments. Also on the docket today: Australian building approvals and Chinese non-manufacturing PMI.

At the time of writing the Australian dollar is buying 102.5 US cents.