The euro fell to a new multi-week low against the US dollar this morning on speculation that the ECB will cut interest rates further at their next meeting. Speaking at a conference in Tokyo overnight, European Central Bank President Jean-Claude Trichet emphasized the need for price stability. Trichet indicated that it is likely there will be a quarter point interest rate cut, while ECB Governing Council member Axel Weber stated that interest rates should not fall under 1%, and if they do inter-bank lending will be adversely affected. Additionally, there were indications that there may be announcements of quantitative easing measures.
In the US, Federal Reserve Bank of Dallas President Richard W. Fisher spoke at Tsinghua University in Beijing, China to address the global impact of the United State's response to the financial crisis. His view was grim, stating that the "American economy (is) in stasis." Fisher also predicted that unemployment in the US will reach at least 10% by the end of 2009.
In the eurozone Trade Balance figures are due to be released this morning. In the US, the Fed’s Bernanke will be making a speech at 17.45 BST.
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