Yet investors indulged in profit taking transactions ahead of a long weekend, the dollar gained back against major currencies today, yet as economists' and investors believe recession is on the way, short term volatility in the financial markets is expected to persist.

Germany released some upbeat data today from the Purchasing Managers Index, as it came better than median estimates and encouraging since Germany counts for almost 1/3 of the Euro Zone economy, but the PMI for the whole Euro Zone area came rather discouraging.

Germany reported today that prices on the producer level increased in February by 0.7 percent above median estimates of a 0.3% rise, while compared with a year earlier prices gained 3.8% also above median estimates of 3.4% rise, as for the PMI, the Manufacturing index rose 54.9 in March from the previous 54.3, while the Services PMI rose to 52.5 from the previous 52.2.

While for the whole Euro Area, the PMI Manufacturing declined as forecaste3d to 52.0 from the previous 52.3, as for the Services PMI it dropped in March below expectations of 52.3 to 51.7.

Now moving on to the U.K, the retail sales inclined in February to 1.0% from the previous 0.8% and well above median estimates of a 0.2% drop, while compared with a year earlier retail sales rose unexpectedly by 5.5%, while the M4 Money Supply rose only by 0.3% in February below median estimates of a 0.9% rise, the M4 indicator is seen as a gauge for inflation and the drop must have come as a relief for the BOE especially as they remain concerned over upside risks to inflation since they struggle to avoid severe slowing in economical activity.

While the outlook for the Euro Zone remains rather unclear, if the Euro Zone actually started to feel the heat of a U.S credit meltdown, the consequences are going to be devastating, particularly as the ECB remained firm against skyrocketing inflation, which rose to a 14-year high at 3.3 percent according to the latest readings in February.

The ECB decided to hold their interest rates steady at 4.00 percent, yet they gave markets the consensus of a Hawkish stance, and stressed that their fundamentals remained sound, but the ongoing turbulence in the financial markets and a $1.50s Euro is not helping the ECB's case!

Later today the U.S will release the leading indicators index, economists believe that the U.S economy continued to weaken further during the course of the first quarter of 2008, while other economies doesn't seem to be really safe from the aftermath of a tumbling U.S economy, but let's hope other central banks manage to go around this critical stage, because if they can't the problem will only intensify…