FXstreet.com (Barcelona) - After two days of optimism, confidence in the financial system has faded and European markets, following Asia have turned down again; The Dollar has strengthened against Euro and Pound and against the Yen it reached a new 3-week low.

European markets are all posting losses beyond 2% with car makers being hit considerably, BMW lost 10% and Japanese economy shrinking the most since 1974.

On the macroeconomic front, German Industrial production experienced the largest fall since reunification in 1990, and Eurozone PPI posting the largest decline in five years. Later today U.S retail sales and Jobless claims might have an impact n the USD, before the Swiss National Bank releases its interest rate decision.

Euro and Pound decline; USD/JPY reaches a fresh 3-week low

USD/JPY has set a fresh three-week low at 95.67 in today's European session and has recovered somewhat to test resistance level at March 6 low at 96.57.

EUR/USD has dropped to 1.2735 from 1.2875 during the Asian session. The pair has performed a partial recovery and climbs towards next resistance level at 1.2822 (Mar 10 high).

GBP/USD has dropped from intra-day high at 1.3920 to a lowest point of 1.3725. For most of the week the Pound has been trading into the range between 1.3700 and 1.3900.