Greece’s likelihood of debt default and exiting the euro currency union impacted the currency in early trading today, falling almost 2 percent.

European share markets looked set to eclipse big declines in Asia, as investors were spooked by the specter of a Greek debt default which forced Athens to shut down its banks to prevent a run on deposits.

Adding to the gloomy backdrop, China shares dived another 7 percent, bringing the losses in the past two weeks to 25 percent, with the Chinese central bank’s measures on Saturday to support the economy unable to calm jittery investors

That left investors with no appetite for riskier assets.

European shares were expected to bear the brunt of the Greek crisis, with Germany’s Dax seen falling up to 3.8 percent, France’s CAC 40 3.6 percent and Britain’s FTSE 2.9 percent.

With the prospect of Greece being forced out of the euro in plain sight, the common currency fell as much as 1.9 percent to $1.0955, its lowest in almost a month. It last stood down 1.3 percent at $1.1020.

Against the yen, the common currency dropped more than 3 percent to as low as 133.80 yen, a five-week low while it hit a 7 1/2-year low of 0.69885 British pound.

U.S. stock futures dived almost 2 percent at one point to hit a three-month low, and last traded down 1.6 percent while Japan’s Nikkei fell 2.6 percent.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 3.0 percent to five-month lows.

In China, the markets were hit by yet more volatility in a wild session that sent indexes down as much as 7 percent at one stage.

The market ructions in China came despite the central bank on Saturday simultaneously cutting interest rates and reserve requirements for the first time since the global financial crisis in late 2008.

“It’s a bit surprising that both the cut in interest rates and RRR in China have come at the same time. It shows that the Chinese policymakers feel a sense of urgency,” Christopher Moltke-Leth, head of client trading at Saxo Capital Markets. “Asia is down because of a risk-off move in response to what’s going on in Europe, in Greece.”

Investors are flocking to safer assets, staggered by uncertainty over the future of Europe, as Greece could become the first country to leave the currency bloc after a default.

*Reuters