EURO COULD FALL FURTHER

This week the euro sold off against 11 of the world’s top 16 currencies by trading volume on speculation the ECB will have to lower interest rates to prevent the region from falling into a recession. European banks have written off $229 billion out of a global total of $588 billion in losses related the collapse of the U.S. subprime market and the credit crisis that began in the United States is now affecting the euro zone. Moreover, even though the Governing Council of the European Central Bank is widely expected to keep rates unchanged at 4.25 percent, Jean-Claude Trichet is likely to acknowledge that recent economic data points towards a sharp contraction in economic activity in the euro zone and lower interest rates could be needed to prevent the region from falling into a recession