Euro did a free fall since yesterday –1.50% against the dollar from 1.4475 to 1.4275, -3.00% against the yen from 156.50 to 151.70 and –0.75% against the safe currency from 1.6015 to 1.5890. The Euro is at its lower lever since the beginning of the year against the greenback after the ECB revised its perspectives on Euro zone’s economic growth for 2008. In addition the Russian central bank’s intervention to support the Rubel yesterday, selling the equivalent of US $4 billion, boosted the descent of the single currency against a basket of currencies.



The press conference following the rate decision of the ECB, holding at 4.25%, was interpreted by the market to be pessimistic. The ECB revised the Euro zone’s economic growth, 1.4% in 2008 versus 1.8% three months ago. In 2009 the GDP should return to 1.2% versus 1.5% previously. Mr. Trichet also expressed his continuing concerns regarding the inflation, thus indicating that the ECB is still caught between the downside risk of growth and the continuous progress of the inflation.



The Euro suffered from a massive sell-off done yesterday by the Russian central bank. To counteract the descent of Rubel, the Russian bank intervened. The amount was reported at US $4 billion. What had probably happened was that the Russian central bank ended up with $4 billion in hand. With a portfolio containing a basket of foreign currencies and $4 billion in hand they had to distribute into other currencies according to a certain percentage. The Euro against dollar was estimated at 1.8 billion, thus commenced the free fall of Euros and the rising of the dollar starting at 16:00 PM CET yesterday.



Today, like every first Friday of the month, the market focused its attention on the employment reports which will be published at 14:30 CET today. The forcast is -75,000 in non-farm sector and 5.70% forcast for the unemployment rate.