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German exports dropped for the fourth straight month in January as global demand weakened amidst economic slowdown.

Data released by the Federal Statistical Office showed that calendar and seasonally adjusted shipments fell 4.4% month-on-month in January to EUR 66.6 billion after falling 4% in December. Exports declined quicker than the expected 4% fall. On an annual basis, overseas sales plunged 20.7%, much sharper than a 7.9% drop in December.

In January 2009, Germany dispatched commodities to the value of EUR 43.9 billion to the Member States of the European Union, which marked a decrease of 18.7% over the previous year. Exports to euro area countries dropped 17.4% to EUR 30.3 billion. Commodities to the value of EUR 13.6 billion were dispatched to EU countries not belonging to the euro area, a fall of 21.4%. Exports of commodities to countries outside the European Union decreased 24.5%.

Imports also slid for the fourth consecutive month in January, but the pace of decline moderated. According to the official data, imports dropped 0.8% month-on-month after a relatively quicker decline of 4.8% in January, while the consensus forecast was for a 3.5% drop. On an annual basis, imports plunged 12.9% following a 4.1% contraction in the previous month. Value of imports was EUR 58.1 billion in January.

The foreign trade balance showed a surplus of EUR 8.5 billion in January, up from December's revised surplus of EUR 7.3 billion, but down from EUR 17.3 billion surplus recorded in January 2008. Upon calendar and seasonal adjustment, the foreign trade balance recorded a surplus of EUR 8.3 billion in January, the statistical office said.

Commerzbank analyst Simon Junker said, "The economy is being hugely impacted also in the first quarter of 2009 by the global recession especially though foreign trade."

"Weak foreign trade is one of the decisive factors why Germany's economy has most probably contracted by 1.5% in the first quarter," Junker said.

The largest Eurozone economy experienced the biggest sequential contraction since the reunification in 1990 on plunging exports in the final quarter of 2008. Gross domestic product fell 2.1% in the fourth quarter, after contracting 0.5% each in the second and third quarters of 2008. The International Monetary Fund projects a 2.5% decline in German output this year.

According to provisional results of the Deutsche Bundesbank, the current account of the balance of payments showed a surplus of EUR 4.2 billion in January 2009, which included EUR1.5 billion service deficit, a surplus of EUR 2.8 billion in net income, EUR 4.3 billion shortfall in current transfers and EUR 1.2 billion deficit in supplementary trade items. In January 2008, the German current account showed a surplus of EUR 15.6 billion.

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The European currency rose against its Swiss, Japanese and US counterparts during Monday's early Asian trading. But the single currency traded lower against the pound, as the latter gained across the board as house prices in UK improved in March.

The euro that closed Friday's North American session at 0.9240 against the UK currency edged lower to 0.9199 in early Asian deals on Monday. The next downside target level for the single currency is seen around 0.897.

The average asking price for a home in Great Britain moved up 0.9 percent to ?218,081 in March compared to the previous month, property Web site Rightmove said today. That marked the second month in a row of increase following the 1.2 percent gain in February.

Against the yen, the euro bounced back after trading lower during Monday's early Asian trading. The euro thus strengthened from 125.57 to 127.16 by about 9:55 pm ET. The pair that was worth 126.69 at Friday's New York session close is now trading at 126.62.

The euro rose from a 4-day low of 1.2836 against the US dollar during Monday's early Asian trading. The euro hit a high of 1.2923 against the buck by about 9:55 pm ET, compared to 1.2929 hit late Friday in New York.

Across the Atlantic, the US empire manufacturing survey for March, net long-term TIC flows for January, NAHB housing market index, industrial production and capacity Utilization for February are due out in the New York session.

The common currency reached 1.5351 against the Swiss franc by about 1.5352 by about 10:55 pm ET Sunday, climbing from its early low of 1.5290. The euro-franc pair that rose to a new multi-month high of 1.5403 on Friday closed the day's deals at 1.5326.

German import price index, Italian February CPI, Euro-zone fourth quarter employment and February month CPI report are the major economic releases scheduled for the upcoming session.

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German economic sentiment improved in March defying economists' expectations, as the European Central Bank resumed interest rate cut and commodity prices decrease, a closely watched survey of financial experts revealed Tuesday.

The Mannheim-based Centre for European Economic Research, or ZEW, said its economic sentiment indicator for Germany rose 2.3 points to minus 3.5 in March, the highest since July 2007. It also marked the fifth consecutive month of increase. Economists had forecast a decline to minus 8 from minus 5.8 recorded in the previous month. However, the indicator is still below its historical average of 26.2.

The ZEW said the indicator's upward movement, which was very dynamic during the last four months, slowed down in March. However, the improvement strengthens the impression that experts are more hopeful with respect to the economic development in Germany on a six months time horizon.

In March, the ECB lowered its key interest rate by half a percent to a record low of 1.5% after keeping the rate on hold at 2% in February. The ECB has now cut its rate by a cumulative 275 basis points since early October 2008.

ZEW President Wolfgang Franz said, "According to the financial market experts, the economic slowdown is gradually phasing out. The bottom of the recession is likely to be reached this summer. The economic situation is extremely bad, but there are first signs of hope. They should not be played down."

According to Simon Junker, an analyst at the Commerzbank, the rise in the economic sentiment suggests that analysts increasingly see an improvement coming in the present disastrous state of the economy in the second half of the year.

Similar to previous months, the current economic situation indicator for Germany dropped to minus 89.4 from minus 86.2, while the consensus forecast was minus 90.

"After past week's miserable figures on order intake and production in the manufacturing sector, the decline of the assessment component is not surprising. Instead - as is usual in recessions - it is approaching the lower," Junker said.

Last week, Germany's Federal Ministry of Economics and Technology had said that industrial production in January declined the most since the reunification of Germany in 1990 and new orders tumbled on a seasonally adjusted annual basis.

The Commerzbank analyst stated, "GDP, will contract sharply in the current quarter and a decline is also likely in the second quarter. The economy is only set to grow again towards the end of the year, although probably by not enough to stop the rise in unemployment."

In the fourth quarter, the largest Eurozone economy experienced the biggest sequential contraction since the reunification in 1990 on plunging exports. The economy shrank 2.1% sequentially in the fourth quarter, after contracting 0.5% in the third quarter.

Further, the ZEW said its economic expectation indicator for Eurozone increased by 2.2 points to minus 6.5. The indicator for the current economic situation in Eurozone rose 0.3 points to minus 90.7.

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Thursday, the scene remained relatively calm in the Eurozone. Outside the euro region, survey data showed that UK manufacturers' output expectations weakened to a level last seen in September 1980. Elsewhere, the Central Bank of Iceland lowered its policy rate for the first time since the crisis-hit country agreed a US$10 billion financial aid with the International Monetary Fund.

Eurozone

There remains room for the European Central Bank to make further interest rate cuts, Governing Council Member Guy Quaden said in an interview with Belgium's Trends-Tendances magazine. "Unlike other central banks we have not completely exhausted our margin for maneuver on interest rates," the policymaker said.

Italy's statistical office ISTAT announced that the total trade deficit stood at EUR 3.59 billion in January, widening from EUR 0.41 billion deficit in the previous month. Economists had predicted a deficit of EUR 2.48 billion.

The Netherlands Central Bureau of Statistics announced that the consumer confidence stood at minus 34 in March, down from minus 30 in February. Economists had predicted the index to decline to minus 32. The office also reported that the jobless rate stood at 4.1% in the December to February period, up from 3.9% recorded in the November to January period. Economists had expected the jobless rate to rise to 4%.

Ireland's Central Statistical Office said that the manufacturing price index rose 3.9% year-over-year in February, larger than the 3.2% rise recorded in the previous month.

The National Statistical Service of Greece said the jobless rate stood at 7.9% in the fourth quarter, up from 7.2% rise seen in the previous quarter. A year ago, the jobless rate was 8.1%.

The Statistical Service of the Republic of Cyprus said the country's gross domestic product or GDP in real terms rose at a pace of 3.7% in 2008, slower than a 4.4% increase in 2007. The agency also announced that the industrial turnover index rose 8.7% year-on-year in December, faster than a 3.2% rise seen in the previous month.

The Statistical Office of the Republic of Slovenia said the seasonally adjusted consumer confidence indicator rose one percentage point in March from February. This was mainly due to an increase in consumer's assessment about the possibility of saving in the next 12 months.

The National Bank of Belgium said in a report that the consumer confidence indicator stood at minus 24 in March, at the same level seen in the previous month. A year ago, the index was minus 3.

Rest of Europe

The latest monthly Industrial Trends survey of the Confederation of British Industry found that only 8% of UK firms expect their production volume to increase in coming three months, while 56% said they would fall. Thus, a resulting balance of minus 48% expects output volume to decline over the coming three months, slightly weaker than minus 44% recorded in the previous month. The survey revealed that around 51% of firms reported below normal export order book levels, which was the lowest since 1998. Nearly 10% of manufacturers intend to reduce domestic prices in the coming three months.

UK's gross mortgage lending declined 15% month-on-month to an estimated GBP 9.9 billion in February, the Council of Mortgage Lenders said. Compared to the previous year, it was a fall of 60% and the value was the lowest monthly lending since February 2001.

In the UK, the public sector net cash requirement was GBP 4.4 billion in February, higher than the net cash requirement of GBP 1.6 billion in the previous year, a report by the Office for National Statistics said. Economists expected a net cash requirement of GBP 4.5 billion.

The Bank of England said in a report that the money supply increased 18.8% year-over-year in February, larger than the 17.4% rise recorded in the previous month. On a monthly basis, money supply rose 1.4% in February, slower than the 2.4% rise in the preceding month. The money supply growth came in line with economists' expectation.

The Icelandic central bank cut its key interest rate by 100 basis points to 17% from a record high of 18%, where it had remained since October 2008. The Sedlabanki also announced that more steps would be put in place over the next few months for the restructuring of the country's crushed financial system.

Switzerland's economic expectations improved slightly in March from the previous month, results of the latest financial market test carried out by the Centre for European Economic Research, or ZEW, in cooperation with Credit Suisse revealed. The ZEW said its economic sentiment indicator marked a slight increase of 0.6 points to the minus 57.1 mark in March. The measure for current economic situation in Switzerland continued to worsen in March. The respective indicator shed 11.8 points to reach minus 57.1 mark.

The Federal Administration of Customs said the Swiss trade surplus in February declined to CHF 731 million from CHF 1.98 billion in January. Exports dropped 3.7% month-on-month in real terms, taking the annual fall to 16.3% in February. Switzerland's watch exports continued to drop for the fourth straight month in February as demand slows, the Federation of the Swiss Watch Industry FH said. The value of watch exports plunged 22.4% year-on-year in February to CHF 1.0 billion. This is the second consecutive fall of this magnitude and the fourth consecutive month of decline.

Statistics Sweden said the jobless rate increased by 1.9 percentage points to 8% in February from last year. Economists expected the rate to come in at 7.4%.

Hungary's Central Statistical Office announced that the average gross earnings increased 5.2% year-over-year in January, larger than the 4.6% rise recorded in the previous month. The average gross earnings growth came in line with economists' expectation.

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After rising to near a 7-week high, the Swedish currency edged down against its U.S. counterpart in early trading on Tuesday. The Swedish krona that rose to 7.9176 against the buck by 2:45 am Eastern Time, reversed direction thereafter and dropped as low as 8.0737 before leveling off towards the mid-morning. The greenback-krona pair that was worth 7.9733 at Monday's North American close is currently trading near 8.042.

The Swedish currency lost ground after the Statistics Sweden announced that the producer price index or PPI rose 3.4% year-over-year in February, slower than the 3.9% increase in the previous month. The February inflation came in line with economists' expectation. Month-on-month, producer prices dropped 0.2% in February, in contrast to a 0.9% rise in the previous month.

Export price index rose 5.5% year-on-year in February, compared with a 5.8% rise in the previous month. At the same time, import prices rose 0.1% versus 1.1% rise in January.

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The dollar was in a holding pattern versus other major currencies Wednesday morning in New York, pausing from a recent downtrend against its European counterparts.

Wall Street was set for a lackluster open Wednesday after President Barack Obama said last night in a televised press conference that he saw "signs of progress" on the economic front.

"We will recover from this recession," Obama said. "But it will take time, it will take patience."

Trading on Wednesday could be impacted by the release of reports on durable goods orders and new home sales. Fuel supplies figures are also due out. Traders are also likely to keep an eye on speeches from Fed Presidents Janet Yellen and Sandra Pianalto.

A day after taking heat from Congress about the AIG bailout fiasco, Treasury Secretary Tim Geithner will talk about the economic and financial crises at the Council on Foreign Relations in New York.

The dollar was slightly firmer versus the euro Wednesday morning, rising a penny to 1.3500. With the modest advance the dollar continued to stabilize following last week's big losses.

Wednesday, a monthly survey from the Munich-based Ifo Institute for Economic Research showed that German business confidence deteriorated to 82.1 in March from 82.6 in February. This was the lowest reading since the survey began in 1991. The expected level for March was 82.2.

The dollar consolidated its efforts to steady versus the resurgent sterling Wednesday morning, holding near 1.4580 as preparations for next week's G20 meeting in London were underway.

Against the yen, the dollar was stable at 97.70, still unable to break up the elusive 100 mark. The Bank of Japan is placing its policy priority on securing market stability and facilitating corporate financing, given the current uncertain economic situations, the central bank's Deputy Governor Hirohide Yamaguchi said Wednesday.

China's central banker chief Zhou Xiaochuan on Tuesday repeated his call for a new global reserve currency managed by the International Monetary Fund.

Pointing out the dangers of relying on the one national currency without explicitly mentioning the dollar, Zhou insisted that an international reserve currency disconnected from individual nations would be able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national currencies.

"The acceptance of credit-based national currencies as major international reserve currencies, as is the case in the current system, is a rare special case in history," said Zhou in a statement released on the People's Bank of China website.

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The dollar was mixed Monday morning in New York after the White House rejected the General Motors' and Chrysler's turnaround plans, raising fears that two of the auto industry's biggest players are headed for bankruptcy.

US stocks futures dropped like a stone Monday morning, and markets in Asia and Europe were a sea of red arrows, fueling increased risk aversion. This gave the dollar a bit of lift versus the euro and sterling, but the buck weakened against the yen as economic data signaled some light on the horizon for the Japanese economy.

While there are no major economic reports due to be released on Monday, there are several key reports that will be released over the course of the week, including the Labor Department's closely watched monthly employment report on Friday.

The dollar fell sharply against the yen Monday morning, once again failing to crack the elusive 100 mark. The dollar dropped to 96 yen, down from Friday's level above 98. Earlier in the month, the down hit a 4-month peak of 99.70.

Industrial output in Japan plummeted by 9.4 percent in February compared to the previous month, the Ministry of Economy, Trade and Industry said on Monday, falling for the fifth straight month and marking the third-largest fall on record.

However, Japanese companies' forecast for industrial output is up 2.9 percent in March and up 3.1 percent in April.

The dollar was able to grind out gains versus the euro Monday morning, rising to a week and a half high of 1.3160. Against the sterling, the dollar rose to 1.4110, having improved from a multi-week low of 1.4777 over the past few sessions.

Eurozone economic sentiment declined further in March, but more slowly than in the first two months of 2009, a monthly survey carried out by European Commission showed Monday.

The economic sentiment index declined to 64.6 in March from 65.3 in February. Economists were expecting a reading of 65.8. The indicator stood at its lowest levels since the series began in January 1985.

Meanwhile, the average price for a home in England and Wales plummeted by a record 10.3 percent on year in March, property industry group Hometrack said on Monday, following a 10.0 percent fall in February.

The average selling price was 156,100 pounds in March, marking the largest decline since the group started tracking home prices in 2000.

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Eurozone annual inflation slowed more than expected in March, adding to concerns of possible deflation and giving room for the central bank to cut rates further. German unemployment increased in March on declining economic activity. Forecasts issued by the Organization for Economic Co-operation and Development, or OECD, and the World Bank revealed a bleak picture of the global economy in 2009, reflecting the rapid deterioration of global financial and economic conditions.

In its interim economic outlook, the OECD forecast the world economy to contract 2.7% in 2009. At the same time, the World Bank lowered its projection to 1.7% decline from just 0.9% contraction predicted initially.

Eurozone

According to a flash estimate from the Eurostat, Eurozone annual inflation halved to 0.6% in March from 1.2% in February. Inflation has slowed to its lowest level since the launch of euro ten years ago. Economists had expected annual inflation to ease to 0.7% in March.

A report from the Federal Labor Agency showed that seasonally adjusted unemployed persons in the largest Eurozone economy rose 69,000 in March, bigger than 50,000 increase in February. Economists had expected a relatively small increase of 52,000.

Meanwhile, the adjusted jobless rate rose to 8.1%, while economists had forecast the rate to remain at February's revised 8%. On an unadjusted basis, the unemployment rate came in at 8.6%, slightly bigger than 8.5% seen in February.

A report from the Centre for Economic Policy Research, or CEPR, showed that the Eurozone fell into recession since the beginning of 2008.

Germany's Federal Statistical Office said in a report that the ILO jobless rate stood at 7.4% in February, up from 7.3% in January. The agency also reported that wholesale trade turnover in real terms dropped 12.2% year-over-year in February, after falling 11.1% in the previous month. Official data showed that French housing starts dropped 22.1% year-on-year in the three months to February. This comes after a 20.2% fall in the three months to January.

The French public debt increased EUR 42.9 billion to EUR 1327.1 billion in the fourth quarter, a report from the statistical office INSEE showed. A year ago, general government debt according to the Maastricht definition was EUR 1208.8 billion.

Retail sales in Spain dropped 11.7% year-on-year in February, faster than a 6.2% fall in January, the statistical office INE said. Economists expected a decline of 6.5%.

The Bank of Spain said in a report that the current account deficit decreased to EUR 6.58 billion in January from EUR 12.03 billion in the same month last year.

The Italian statistical office ISTAT said retail sales rose 0.7% year-on-year in January, while economists anticipated 2% fall. The office also reported that consumer price index including tobacco rose 1.2% year-over-year in March, slower than the 1.6% increase in the previous month. The March inflation came in line with economists' expectations.

The Statistical Office of the Republic of Slovenia announced that the consumer price index or CPI rose 1.8% year-over-year in March, slower than the 2.1% rise recorded in the previous month.

Statistics Portugal announced that the retail trade turnover at constant prices dropped 4.8% year-over-year in February, compared with a 0.1% fall in the previous month. Industrial production dropped 13.7% year-over-year in February, after falling 16.6% in January.

Rest of Europe

UK's service sector output fell 1.3% in the three months to January following a fall of 0.8% in the three months to December, the Office for National Statistics said. This is the seventh consecutive three months on previous three months decrease.

Consumer confidence was higher for the second consecutive month in Great Britain, data consolidator GfK NOP said, suggesting that measures to end the recession are starting to take hold. The consumer confidence index came in at minus 30 versus analyst expectations for a score of minus 37 following the minus 35 reading in February.

The Swiss UBS consumption indicator dropped to 0.89 in February from 0.92 last month, the UBS said. The indicator thus continued its downward trend and remained below its long-term average of 1.5 for the fifth consecutive month.

Switzerland's current account surplus totaled CHF12 billion in the fourth quarter, down from a surplus of CHF16.7 billion in the third quarter, a report by the Swiss National Bank said.

Industrial production in Estonia plunged a working day adjusted 30.3% year-on-year in February, compared to a 26.8% drop in the previous month, a report by Statistics Estonia said. The agency also reported that retail sales at constant prices fell a record 18% in February compared with the previous year. The latest decline dwarfed the 10% fall witnessed in the previous month. Further, Estonia's general government budget's deficit stood at 3% of GDP in 2008.

The Estonian economy is expected to contract 8.5% this year, the Finance Ministry reported Tuesday. This was much weaker than the 3.5% decline estimated earlier.

Statistics Denmark revealed in a latest report that the nation's Gross Domestic Product or GDP fell a seasonally and price adjusted 1.9% sequentially in the fourth quarter, revised from a 2% fall reported initially. Economists were looking for a decline of 2%. In the third quarter, the GDP was down 0.4%.

Turkish GDP at constant prices fell 6.2% year-on-year in the fourth quarter, reversing from a revised 1.2% rise in the third quarter. Economists expected GDP to fall 5.4% in the fourth quarter.

The Swedish economy will decline 3.9% this year, which would be followed by a meager 0.9% growth in 2010, the National Institute of Economic Research or NIER said. Further stimulus to demand with both monetary and fiscal policy is required to dampen the effects of the severe economic contraction, the think tank noted.

The NIER also said the consumer confidence indicator dropped to minus 16.5 in March from minus 14.6 in the previous month. Economists expected the indicator to come in at minus 13.8.

Statistics Norway showed that the twelve-month growth in the C2 credit indicator slowed to 9.4% at the end of February from 9.9% at the end of January. The C2 indicator's growth in February was in line with economists' expectations.

Hungary's current account showed a deficit of EUR2.5 billion in the fourth quarter, narrowing from a deficit of EUR2.6 billion in the third quarter, a report by the Magyar Nemzeti Bank said.

The Czech National Bank announced that the M2 money supply grew 8.5% year-on-year in February, slower than an 8.6% rise in the previous month.

Statistics Iceland said that the trade surplus stood at ISK 6.29 billion in the January to February period, compared to a deficit of ISK 35.96 billion in the corresponding period of the previous year.

Georgia's GDP at market prices declined 2.5% year-on-year in the fourth quarter, compared to a 3.9% fall in the previous quarter, a report by Statistics Georgia said.

Statistics Lithuania revised the fall in the gross domestic product for the fourth quarter to 2.2% year-on-year from 2% reported initially. In the third quarter, the GDP rose 2.9%.

The Statistical Office of the Republic of Serbia announced that the GDP rose 5.4% annually in 2008, revised from 6.1% reported initially. The agency also said that the retail price index increased 9.9% year-over-year in March, slower than the 10.7% increase in the previous month. Further, industrial production dropped 19.7% year-over-year in February, after falling 17.1% in January.

Croatia's Central Bureau of Statistics announced that the industrial production declined 7.5% year-over-year in February, after falling 6.8% in January.

Romania's central bank kept its key interest rate unchanged at 10% per annum. The decision was in line with economists' expectations.

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Monday, Japan's Finance Minister Kaoru Yosano told reporters after meeting with Prime Minister Taro Aso that the government intends to compile a new stimulus package worth 2% or more of gross domestic product. Accordingly, new fiscal spending would exceed 10 trillion yen. Details of the third package are likely to be finalized by April 10.

Elsewhere, a report from Japan's Economic and Social Research Institute showed that the leading index decreased to 75.2 in February from 77.2 in the previous month. Economists expected the indicator to come in at 75.3. At the same time, the coincident index declined to 86.8 from 89.5 in January.

Taiwan's consumer price index, or CPI, declined for the second consecutive month in March with a 0.15% year-on-year fall, the Directorate General of Budget, Accounting and Statistics said. Economists had expected a 0.6% fall for March following a revised 1.33% decline in February.

On a monthly basis, the CPI climbed 0.11% in March, while the core CPI rose 0.81% year-on-year. For the first quarter, consumer prices fell 0.01% annually.

Further, the wholesale price index, or WPI, fell 0.12% month-on-month and 9.20% annually in March. In the first quarter, the WPI dropped 9.77% compared with the same period of the previous year, of which the import and export price index declined 11.64% and 6.64%, respectively.

Producer prices in the Philippines rose 2.7% year-on-year in February, slowing from a revised 3.3% increase in the previous month, the National Statistics Office said. Month-on-month, producer prices fell 0.1% in February, compared to a revised 2.5% decline in January, mainly due to prices falling in seven of the major sectors.

In other news, the Reserve Bank of India governor Duvvuri Subbarao said in a business conference that the country's fiscal year 2010 current account deficit is expected to widen.

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The dollar rallied verus the euro and sterling Tuesday morning in New York as risk averse traders expressed concerns about the start of earnings season, which kicks off today with quarterly results from Alcoa.

Traders considered results showing that sconomic contraction in the euro area in the fourth quarter was more than initially estimated.

Final data from the Eurostat showed that gross domestic product, or GDP, contracted 1.6% quarter-on-quarter in the final three months of 2008. The pace of decline was slightly up from the previously estimated fall of 1.5%. GDP fell 0.3% each in the third and second quarters.

Here in the US, the economic calendar is light again on Tuesday, The consumer credit report from the Federal Reserve is due out this afternoon. Borrowing costs are expected to have fallen by 1.5% in February.

Looking at currencies, the dollar rose to 1.3252 in early action Tuesday. The pair has been moving between 1.3000 and and 1.3800 for the past few weeks.

The dollar also gained a bit of ground against the sterling, rising to 1.4650. Overall, the pair has seen choppy trading over the past few months, with the dollar leveling off since hitting a 23-year hoigh of 1.3501 earlier in the year.

Tuesday, a quarterly Economic Survey from the British Chambers of Commerce confirmed that the UK recession is still very serious and expects it to continue for some time. The business lobby said there is a clear need for corrective action and urged the government to act forcefully to ease the recession.

The dollar eased slightly versus the yen, but remained above the 100 mark, which was cracked on Friday for the first time since last fall. The dollar was at 100.18 yen as of 8 am ET.

Tuesday, the Bank of Japan retained its key interest rate, but it decided to expand the range of eligible collateral in order to make funds easily available.

The Policy Board of the central bank unanimously voted to hold the uncollateralized overnight call rate at 0.1%. The decision came in line with economists' expectations. The previous change in interest rates was a 20 basis point cut implemented in December 2008.

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