Not to be outdone in the apparent race to the bottom among the major Central Banks, Axel Weber, head of Germany's Bundesbank and ECB council member, said in a speech on Friday that the ECB still has room to maneuver in relation to interest rate cuts which we will use.

The ECB has had to take a somewhat different approach to easing the financial crisis than the Fed or BoE, because European Union rules do not allow the Central Bank to buy bonds directly from governments. The ECB currently offers unlimited liquidity to banks for loans at its prevailing benchmark rate (currently 1.5%) for up to six months. ECB President Trichet said at the last rate decision that such liquidity will be provided at least through the end of the year.

The BoE recently implemented a plan to purchase up to 150 billion pounds in U.K. gilts, while the Fed on Wednesday announced its intention to purchase up to $300 billion in longer-dated Treasuries.

French President Nicolas Sarkozy today urged the ECB to boost the euro-area economy by broadening the collateral it accepts when making loans and buying commercial paper.

“The central bank must widen the quality of paper it accepts,” Sarkozy told reporters after a meeting of European Union leaders in Brussels.

The Financial Times had an interesting article on Friday regarding the Norwegian krone, which David Bloom of HSBC views as the ultimate haven currency.

During the crisis, the dollar enjoyed a liquidity premium as investors the world over demanded dollars, which were in short supply. The Swiss franc and yen gained on safe-haven flows and as traders unwound carry trade positions as global equity markets collapsed over last Fall.

Simon Derrick at Bank of New York Mellon says: “The dollar has clearly been supported by haven flows during the current crisis.

“But, in the longer-term, the sheer scale of US fiscal spending and the lack of international capital available to support it represents a direct threat to the dollar’s strength.”

The swissy has lost favor despite its rise after the Fed's move this week) primarily because of the SNB's intention to weaken the currency by intervening in the market. Traders also fear the BoJ could follow the SNB.

There are a number of reasons why the krone is near or at the top of the league among the world’s 10 most traded currencies.

Norway’s economy grew 1.3% in the fourth quarter of last year and is not forecast to experience as big a downturn as most other leading economies in 2009.

Monetary policy is also supportive of the krone, with the Norges Bank, Norway’s central bank, like those in other commodity-producing countries such as Australia and New Zealand, not expected to resort to quantitative monetary easing to boost inflation expectations. The country also has a large current account surplus.

The cost of insuring against sovereign default in Norway through credit default swaps is the lowest among the countries with the ten most traded currencies.

Norway's current account surplus is at 5% of GDP, the biggest in the industrialized world.

However, some analysts are less glowing about the krone’s prospects.

Gavin Friend at NAB Capital agrees the krone appears one of the best of a bad lot, with a healthy current account balance and interest rates likely to lend it support.

But Friend said “you are trying to win the least ugly currency contest at the moment. I can’t disagree that it might move higher, but I can’t get too enthusiastic.”

His main concerns are the lack of liquidity in the market and the krone‘s long-held correlation with oil prices.

“I struggle to see how the Norwegian krone can outperform for a sustained period if oil prices remain low,” he said.

Of course, with quantitative easing and the printing money being expanded across the world, gold’s defensive properties are set to become more desirable.

John Paulsen of hedge fund Paulsen & Co., who made $2 billion in 2008 betting against financial shares and mortgage-backed securities, took a $1.28 billion stake in gold miner AngloGold this week as part of a bet that gold would benefit as paper currencies were debased by global central banks turning on the printing presses to tackle the financial crisis.

“In a world where central banks are expected to increasingly turn to quantitative easing, there are less and less havens in currency terms. Gold should look increasingly attractive,” said Mr. Derrick.