The euro slumped to a record low against the Swiss franc amid deepening concern Europe’s sovereign-debt crisis will worsen, damping the appeal of the region’s assets.

The European Central Bank will accept Greece’s government bonds as collateral in its refinancing operations as long as the country’s consolidation program stays on track, Ewald Nowotny, an ECB Governing Council member, told reporters today. Officials said last week it may not be able to take Greek sovereign debt as collateral if bond maturities are extended.
“With the authorities still seemingly divided over how to proceed with the debt crisis, there remain considerable short-term risks for the euro,” Derek Halpenny at Bank of Tokyo-Mitsubishi UFJ Ltd. wrote today.

Australia’s dollar was among the worst performers against the greenback after a Chinese manufacturing gauge fell to a 10-month low amid concern the global economic recovery will falter.
The preliminary purchasing managers’ index for China compiled by HSBC Holdings Plc and Markit Economics fell to 51.1 in May. It was 51.8 in April.
China is the nation’s biggest trading partner.
“A softening in Chinese manufacturing PMI overnight has been enough to revive fears that the pace of growth may be decelerating", Jane Foley, a senior currency strategist at Rabobank International wrote today. “The franc and the yen have inevitably benefited from it.”