The dollar slipped against the Euro and British Pound hurt by continued concerns over the US economy. The equity markets tumbled, beginning in Shanghai and ending in New York. The International Monetary Fund announced that the US is slipping into a recession. What investors are mostly concerned about at this time is the spill-over effect of the housing market into many other sectors of the economy. Even though President George Bush unveiled a proposal to stabilize the housing market, the economy will not feel the effects until months and years to come.

The European Central Bank is expected to remain hawkish in its view on the euro-zone economy. Traders however will be particularly cautious as European economic data begins to soften triggering questions on how long the ECB can go on without cutting rates. The Bank of England seems ready to cut rates as the UK economy absorbs the effects of the credit and housing crisis. The Euro traded to a high of 1.5865 and British Pound to a high of 1.9792 against the greenback in yesterdays session.