USD Remains on the Backfoot Following the FOMC's Massive Monetary Easing Policy

The USD remains on the backfoot following the FOMC's massive monetary easing policy by using its balance sheet in an attempt to unclog credit and reflate the US economy. The increased money supply and lower interest rates should help to boost risk appetite and at a minimum prevent the US economy from falling into deeper recession. The nagging question remains whether this alone can help boost lending given that unemployment is still at lofty levels. Commodities which are priced in USD surged with precious metals and crude oil rising above $52 leading the charge.

This has seen Aud/Usd and Nzd/Usd chalk up gains of 8% and almost 10%, respectively, over the last week. The EUR and GBP were both beneficiaries of the Greenback's current woes rather than any fundamental shift towards both currencies. ECB Webber speaking.

Euro Interest Rate Cute in March 2009

ECB's Papademos, broadly in line with other council members, is quoted as saying a further rate cut in March "maybe appropriate" in order to maintain inflation over the medium term, at a level consistent with price stability.

Speaking in London, Papademos doesn't rule out inflation falling close to zero for a short period; but once again sees the risk of deflation in the Eurozone as "remote". Otherwise economic risks remain to the downside, with it too soon to say whether a bottom has been reached. Meanwhile the ECB VP says any unconventional policy steps will be taken independent of rate policy. ECB members have been talking up the chances of a further rate cut in recent days, with a 50bps reduction from the 2% level, now more or less assured for the upcoming March 5 policy meeting.

More Jobs are Expected to be Lost in Malaysia

According to local reports, more than 10,000 have lost their jobs since January, citing Employer Federation executive director Shamshuddin Bardan.

Shamshuddin said more jobs are expected to be lost in the days ahead as companies, particularly in the manufacturing sector struggles to stay afloat. In an urgent appeal to the government yesterday, Shamshuddin said it was utmost importance for second economic stimulus package to be released fast so that companies know where they stand.

He added that economic downturn is much worse than 1997, and made critical as almost 600,000 job seekers enter the local market each yr, with another 1.5-2.0 millions foreign workers competing for same jobs.