The European Central Bank cut its interest rate today by 25 basis points to mark a new all-time low rate level for the eurozone. Today’s rate reduction was less than the 50 basis point cut economic forecasts were generally expecting and brought 
the rate from 1.50 percent to 1.25 percent. The ECB now has reduced its rate by 300 basis points since October 8th when it participated in coordinated rate reductions with central banks around the world.
Jean-Claude Trichet, the President of the ECB, commented in his press conference today that “today’s decision takes into account the expectation that price pressures will remain subdued, reflecting the substantial past fall in commodity prices and the marked weakening of economic activity in the euro area and globally. The latest economic data and survey information confirm that the world economy, including the euro area, is undergoing a severe downturn. Both global and euro area demand are likely to remain very weak over 2009, before gradually recovering in the course of 2010.”
Trichet also did not rule out further rate reductions and that any “nonstandard” bank measures implemented would be discussed at the next rate meeting in May.
US Weekly Jobless Claims rise to highest since early 1980’s.
Weekly U.S. initial jobless claims rose more than expected in the week that ended on March 28th according to the U.S. Labor Department today. Jobless claims totaled 669,000 unemployed workers, an increase of 12,000 from the week prior that had 657,000 initial jobless claims. The jobless increase marked the highest level since 1982 and surpassed forecasts expecting claims to number approximately 650,000. A 4-week moving average of unemployed workers showed an increase of 6,500 from the prior week to 656,750 workers.
Meanwhile, workers seeking continued claims for unemployment benefits for the week ending March 21st grew by 161,000 workers to a total of 5,728,000 unemployed workers. The four week moving average of continuing claims grew by 163,500 workers from the previous week to 5,496,500 workers.
US Dollar falling in forex trading today.
The U.S. dollar has been falling in forex trading today against the major currencies as stock markets have rallied on positive sentiment of the G20 meetings and new flexibility in mark-to-market rules. The Dow Jones Industrial Average has gained by over 250 points at time of writing to pass the 8,000 threshold. The Nasdaq has gained by 50 points while the S&P500 has advanced over 25 points.
The dollar, meanwhile, has fallen against the against all the major currencies today except the Japanese yen.
The euro has advanced versus the dollar for the second day in a row as the EUR/USD has gone from today’s 1.3272 opening exchange rate at 00:00 GMT to trading at approximately 1.3476 in the US trading session at 1:39pm EST according to currency data by Oanda.
The British pound has increased today versus the American currency as the GBP/USD has gone from 1.4494 to trading at 1.4722 dollars per pound.
The USD has declined against the Swiss franc with the USD/CHF falling from the 1.1439 opening to trading at 1.1334. The dollar has also decreased against the Canadian dollar as the USD/CAD dropped from the opening at 1.2549 earlier today to trading at 1.2371 later.
The Australian dollar has traded higher versus the USD as the AUD/USD trades at 0.7168 after opening today at 0.7026 while the New Zealand dollar has gained versus the USD and trades at 0.5806 after opening at 0.5678.
The dollar has advanced against the Japanese yen today as the USD/JPY has gained from its 98.72 opening to trading at 99.33.
EUR/USD Chart – The Euro advancing today against the US Dollar in Forex Trading and trading above its 21-day moving average in blue(Daily Chart).
