Since hitting a record high above 1.60 less than 2 weeks ago, the Euro has fallen over 600 pips against the US dollar. Today, the currency pair (EUR/USD) has recovered, which is unsurprising given the strength of its recent move lower. The final figures for manufacturing PMI are due for release tomorrow and any revisions are likely to be to the downside. However that may be countered by the producer price reports which are expected to be stronger. With the ECB monetary policy decision scheduled for Thursday, we are still skeptical of the latest recovery. The central bank has a tough decision ahead of them and today’s record high in oil prices is not helping. Economic growth has taken a turn for the worse and if not for the strong inflationary pressures, the European Central Bank would have probably cut interest rates already. However inflation is rampant and because of that, it is not clear which way Trichet will sway on Thursday. Traders will be hanging onto his every word, looking for a hint of dovishness. For the time being, the downtrend in the Euro remains intact as the market waits for the ECB to ease and the Federal Reserve to pause. This shift in monetary policy expectations is significant and one that currency traders should not ignore. Meanwhile Swiss consumer prices are also due for release tomorrow. Although price growth is expected to have accelerated in March, consumer prices have remained relatively tepid across the globe, which means that the CPI number may fall short of expectations.