as the consequences of the worst financial crisis since the Great Depression are yet to disappear.
The Reserve Bank of Australia announced earlier today a 25 basis points rate cut to drive interest rates down to the lowest in 49 years at 3.00 percent opposing market expectations of an unchanged rate, as the economy is falling deeper in recession amid slowing global demand and tightened credit conditions.
The Australian economy is expected to undergo its first recession since 1991, as falling exports amid the ongoing global recession and rising unemployment as companies adjust their output with the current sluggish levels of demand continue to weigh down on economic growth.
Meanwhile the United Kingdom will release today the industrial production index for the month of February, the index is expected to drop by 1.2% following the prior reported drop of 2.6%, while compared with a year earlier industrial production is expected to have dropped by 12.5% following the prior drop of 11.4%.
Also the U.K. will release the manufacturing production index for the month of February, the index is expected to drop by 1.5% following the prior drop if 2.9%, while compared with a year earlier manufacturing production is expected to have dropped by 14.2 following the prior drop of 12.8%.
The U.K. economy continues to weaken deeply, as tightened credit conditions, slower consumer spending, falling home values and rising unemployment are indeed pushing the economy further into recession, as nearly all sectors including the services sector which accounts for almost Â¾ of economic output are deteriorating heavily.
The Nationwide consumer confidence index for the month of March is expected to show a slight rebound in confidence to 45 from the prior reported estimate of 43, Britons are still feeling the pinch from the ongoing recession, as their home values continue to decline, while they continue to lose their jobs amid the challenging economic conditions.
Moving on to the euro zone, as the final GDP estimate for the fourth quarter of 2008 will be released today, GDP is expected to have contracted by 1.5 percent during the last three months of 2008 unrevised from the prior estimate, while the euro zone economy is expected to have contracted over an annualized 1.3% also unrevised from the prior estimate.
The euro zone economy has been weakening severely over the last few months, as the ongoing global crisis continued to weigh down heavily on economic activity, as the areaâ€™s largest economies led by Germany are indeed undergoing recession.
The Euro continued to retreat against the U.S. dollar this morning, as the pair dropped back to the $1.33 levels, and the pair is seemingly on its way back to the $1.32-$1.31 levels, and if the current wave of pessimism among investors prevail for a while, the pair might indeed drop below the $1.30 level.
Meanwhile the Euro retreated against the Japanese Yen, as the pair fell from yesterdayâ€™s highs of 137 towards the 134 levels, and the pair is also expected to drop further today and could reach the 132 levels or even below this level, as targets are set to be well below the 130 level.
The U.S. dollar on the other hand managed to rise yesterday against the Japanese Yen, however the pair started to drop back after reaching near the 101.65 level which pushed the pair back towards the 100 levels, and the pair seems to be on its way to break the 100 psychological level and head towards the 98 levels.