Downtrend likely to continue.

Today the Euro fell to a near two year low, following a meeting of Euro zone finance ministers which had offered no positive surprises. The Australian Dollar dipped on the release of disappointing Chinese import data.

Euro zone ministers have agreed to grant Spain until 2014 to reach its deficit reduction targets, in exchange for further budget savings and had set the guidelines for an aid package for Spain's ailing banks.

However, no apparent progress was made by them as regards the activation of the Euro bloc's rescue funds, in order to intervene in bond markets and thereby bring down the spiralling borrowing costs for Spain and Italy.

After the European Central Bank had cut interest rates last week and on the back of a renewed rise in Spanish bond yields back above the critical 7% level, seen as unsustainable in the long-term, the Euro has taken a hit.

Analysts agree that investor concerns over Spain's fiscal health and the Euro zone's sovereign debt crisis remain.

Reports due out today from the Paris based national statistics office, are expected to show that industrial production in France and Italy has shrunk as Europe's debt crisis undermines growth.

It appears that there is still a long way to go before the stage is reached at which policymakers will be ready to act, especially as relates to potential bond purchases in the secondary market. The outcome of the Euro zone finance ministers' meeting highlights a seeming lack of urgency on the part of policymakers according to many traders.

This in turn results in a weaker risk appetite and translates to a stronger Yen and Dollar, with many analysts predicting that the Euro's overall trend toward the downside is likely to continue in the days ahead.

The Euro had dipped 0.2% to $1.2287 earlier today, close to a two year low of $1.2225 hit on Monday. The Euro was also down 0.3% to the Yen at 97.70 Yen, close to a one month low of 97.48 Yen touched yesterday.

The Greenback dipped 0.1% to 79.50 Yen. It remains range bound between 79.08 Yen to 80.10 Yen since late June.

Disappointing Chinese trade data saw the Australian Dollar slip 0.3% to $1.0174.

China's imports in June had grown at half of the expected pace. This underscored concerns that China's economy and domestic demand are slowing rapidly, notwithstanding export growth being slightly better than expected.

China remains Australia's single largest export market and the health of China's economy always influences the commodity currency.