The Swiss franc nose-dived on Thursday after the Swiss National Bank cut interest rates to a record low of 0.25% and announced that it had been intervening in the foreign exchange markets in order to weaken the franc. In addition to buying foreign currencies, the central bank will also purchase bonds in an attempt to bring the Swiss economy out of its worst recession in over 30 years.

Dollar and euro rallied against the Swiss franc to 1.1969 and 1.5339 respectively (highest since December '08) as the central bank's announcement surprised the market despite the 25 basis-point rate cut being in line with economists' forecasts. The SNB had not intervened in the currency market since 1995 and is one of the latest central banks to announce quantitative measures.

The Japanese yen also declined sharply on Thursday from 95.65 to 96.53 versus the dollar and from 122.12 to 126.40 against the euro on the back of the rally in U.S. equity markets (the Dow ended the day up 239 points) and the intra-day rise in oil prices. The recent weak data out of Japan economy (fourth quarter GDP fall 12.1% on an annualised basis) has also lowered the Japanese currency's appeal as a safe-haven currency and the sterling and Australian dollar rallied to intra-day highs of 136.54 and 64.18 respectively against the yen.

U.S. retail sales fell by less than expected in February (-0.1% versus the consensus forecast of -0.4%) while weekly jobless claims rose to 654,000 from 645,000, however, the focus was mainly on the SNB's statement regarding intervention.

Economic data to be released on Friday include Japan industrial production and consumer confidence, German wholesale prices, Swiss combined PPI and eurozone retail sales. U.S. trade data is due out at 12:30GMT (economists expect the trade deficit to narrow to $38.2 billion from $39.9 billion) while the University of Michigan sentiment survey will be released at 13:55GMT (the index is forecast to drop to 55.0 from 56.3).