Concern about a weakened U.S. economy and the Federal Reserve’s fears about deflation continue to cast a pall over the markets. This was exacerbated on Sunday when American Treasury Secretary John Snow observed that a weaker dollar is good for American exporters.

This drove the U.S. currency to another four-year low against the euro, which traded as high as US$1.1621 in morning trading in Europe.

The Canadian dollar got a boost, too. It topped US72¢ this morning reaching a new five and a half year high.

In Europe stocks are trending negative. In part this is due to the fact that the European Central Bank and the Bank of England decided not to cut interest rates. London’s FT-SE 100 index is flat at midday, slipping 5.1 points to 3,964.3. Frankfurt is down 1.8%. Paris is down 0.5%.

Futures trading is pointing to a poor to moderately positive opening for equities.

Asian stock markets closed higher after their Monday trading, riding on Friday’s gains on Wall Street. In Tokyo, Nikkei stocks ended moderately higher as rallies in U.S. technology shares Friday encouraged investors to buy related Japanese issues.

Hong Kong stocks also ended higher due to hope that the WHO will also lift the SARS travel warning that it imposed on the territory.

Back at home, Statistics Canada is reporting that housing prices continue to rise right across the country. The New Housing Price Index increased in March up 0.1% from February. On a 12-month basis, this index of contractors’ selling prices increased 4.8%, down slightly after three consecutive months of annual increases of 5.1%. Of the 21 urban centers surveyed, 12 registered monthly increases, led by Saskatoon (+1.3%), London (+1.1%), Hamilton (+0.8%) and Winnipeg (+0.8%).