This forex trading week saw continued weakening of the U.S. dollar against many major currencies as the world’s largest economy enters, if not a recession, then something remarkably similar. No bottom has yet been reached for the global financial crisis, with current loss estimates at $181bn and investors again reducing high-yielding risky positions.

With carry trades and equity indices again unwinding, the Australian dollar declined against 11 of the 16 most actively traded currencies, including the Japanese yen and USD, despite the RBA’s decision to raise interest rates 25bps to 7.25% on 4 March, and despite continued record commodity prices. AUD/USD consolidated this past forex trading week, tightening into a triangle with higher lows and lower highs; a break through resistance at 0.9420 (Monday 3 March’s high) is necessary to resume the uptrend from 0.4773.

A U.S. real estate report of record foreclosures and late payments, amidst the worst housing correction of 25 years, alongside a jobs market that declined for two consecutive months and rising consumer prices, precipitated the USD’s slide into record weakness against multiple currencies, including the Euro and the Swiss franc.

Poised between rising inflation and lowering economic projections, the Eurozone’s ECB, as expected, left interest rates on hold at 4% on 7 March, with a released statement as delicately balanced between price stability and the strengthening EUR. The new record for EUR/USD, set Friday 7 March after a run that on H4 charts seems unbroken since Wednesday 5 March, is 1.5462; however, RSI and other overextension readings hint at possible consolidation before further strengthening.

The BoE also left interest rates on hold, at 5.25% on 6 March, and lowered growth expectations for 2008, although the forex trading market widely believes cuts are coming later this year. With this short-term reprieve, GBP strengthened against EUR, recovering from a record 0.7692 to close at 0.7616. GBP/USD broke out of its 1.9375–1.9950 trading channel after forming a double bottom with the psychologically important 2.0000 level close to the neckline, best seen on daily charts.

With growing economic indications the U.S. slowdown is reaching north of the border, particularly in the form of falling Canadian exports, BoC lowered interest rates 50bps to 3.5% on 4 March and additional cuts are likely. CAD/USD continues to trade within a channel approximately three cents above and below parity, with roughly defined borders near 0.9700 and 1.0300, and is currently at 0.9893, rising from near the bottom of the channel.

As expected, the BoJ left interest rates untouched at 0.50% on 7 March. JPY remains a barometre for risk aversion, and currently the scale measures high; USD/JPY lost 12% in the preceding twelve months, touching 101.43 before recovering to 102.67 before closing on 7 March. The weekly chart shows a sharply descending series of four progressively lower lows; on that chart, the RSI reading has not topped 50 since 15 July 2007 and the start of the credit crisis.

The Swiss central bank meets Thursday 13 March; interest rates are widely expected to remain on hold at 2.75%. USD/CHF broke through support at 1.0334 on 6 March, reaching a new historic record low at 1.0133 on 7 March; however, RSI diverged, and this may be an important short-term bottom.