Grim data from the Eurozone Monday suggests the overhang from the region's sovereign debt crisis – and the austerity measures it's created – will have a deeper impact on the economy than first anticipated.

The Markit Economics Purchasing Managers Index – one of the most reliable gauges of future economic activity – showed manufacturing activity around the 17-nation euro zone slipped for the eighth consecutive month, indicating a greater chance the world's second-largest economic block may slide back into recession.

Unemployment in the region was also measured at 10.8 percent today, according to Eurostat, the highest level of joblessness in at least 15 years.

The news comes only days after Spain presented its latest budget effort to trim its deficit to the EU's preferred 5.3 percent target. The €27 billion plan will likely satisfy the bond markets, but it's unlikely to provide a growth catalyst for an economy that's expected to shrink by at least 2.7% this year.

Meanwhile, an influential think-tank in Greece says its domestic economy will shrink a staggering 5% in 2012 as the full impact of its own austerity measures – controversially put in place to secure a second EU/IMF bailout – begins to bite

The single currency fell sharply on the days' data to trade at around $1.3285 against the US dollar.