Concerns that U.S. equity markets may be overbought are helping to drive down demand for stocks overnight. In addition, traders are lightening up positions ahead of this week's Federal Reserve FOMC meeting. Investors will be watching to see if the Fed announces an end to its stimulus plans. The G-20 meets later in the week. Traders will be watching this meeting to see if there is any talk of limiting the Dollar's role as the world's reserve currency.

Despite the weakness in the equity markets, Treasury futures are trading lower. This week's $112 billion auction is providing the pressure as once again supply will rise. The recent lower yields may encourage investors to ask for higher interest rates on these debt instruments. Traders will also be watching to see if China retaliates to the recent boost in taxes on imported tires by cutting back on demand for Treasury debt.

The U.S. Dollar finished last week with a strong rally as traders reduced their exposure to higher-yielding assets. Based on the overnight action, it appears to be starting the week in the same fashion. Global financial system worries, the G-20 meeting later in the week and the possibility the Fed will announce an end to its economic stimulus programs has encouraged traders to pare positions.

The December British Pound continues to feel to downside pressure. Shorts are dominating this currency as stories continue to circulate that the Lloyds Banking Group Plc lacks sufficient capital. Traders reacted negatively on Friday to the news that Lloyds may exit a government program designed to insure nearly $425 billion of its risky assets.

The December Euro is expected to open weaker as traders reduce exposure to higher risk assets. The Euro was able to finish higher last week, but negative feelings toward the global banking system may trigger weakness this week or at the least put this currency into a consolidation pattern.

The Dollar gained ground versus the Japanese Yen last week. Weakness in the December Japanese Yen was triggered by comments from the Japanese Finance Minister. He stated that exchange rates should reflect economic fundamentals. This statement triggered selling in the Yen late last week which solidified a weekly technical closing price reversal top. The December Japanese Yen closed lower on the weekly chart after a prolonged move to the upside. This reversal top was confirmed overnight which means the Yen is likely to break to at least 1.06.

Mixed equity markets and weaker energy prices are helping the December Canadian Dollar weaken overnight. With this market so close to its highest level for the year, top pickers are starting to come in to drive it lower. Furthermore, the Bank of Canada does not want its currency to rise to a level where it hurts Canadian exports. The December Canadian Dollar could break sharply lower if global banking concerns trigger a flight to the U.S. Dollar.

The stronger Dollar has sent December Gold back under $1000. The current chart pattern suggests an acceleration to the downside under $993.00. The next major support area is $970.