Currency expert Kathy Lien gives 5 reasons why the plunging dollar, which has fallen to a record low against the euro and an 8 year low against the Japanese yen, continue will continue its precipitous decline.

1. Non-Farm Payrolls Will Continue to Fall

For 2 months in a row, jobs decreased in the US economy. I expect these numbers to worsen over the next few months because the current state of the labor market is nothing compared to the 15 consecutive months of negative job losses between 2001 and 2002.

2. The Federal Reserve is on High Alert

Not only are Fed Fund futures pricing in a 98 percent chance of a 75bp rate cut on March 18th, but the Federal Reserve is on high alert. For lack of a better description, they are “freaking out.” Friday morning, they announced moves to pump 200 billion dollars into the banking system to ”address liquidity pressures in the funding markets.” Although they denied that this was related to the weak jobs report, the timing is certainly suspect. The announcement may have been aimed at preventing a non-farm payrolls induced collapse in the stock market, which worked for about an hour before stocks completely reversed all of its gains.

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(New York Times) In the last seven months, policy makers have cut interest rates, injected money into the banking system and approved a fiscal stimulus package in an effort to keep the economy from slipping into a recession. Often, the moves seemed to work at first, only to be overtaken by more bad news.

 The failure of any of the usual fiscal and monetary policy tools so far raises questions about what the Federal Reserve and federal government can do in the near term to counter the forces that have battered housing prices and pushed down the stock market and are now causing a hiring slowdown

“There are times when there is only so much the Fed can do,” said Barry Ritholtz, chief executive of FusionIQ, an investment firm in New York. “It can smooth out the business cycle a little bit, but last I checked, we haven’t done away with the business cycle.”

One of the main problems now is a deepening crisis of confidence that is compounding the ill effects from the housing downturn. As lenders and businesses become more cautious about whom they lend to and hire, they are slowing an already weakened economy.

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PARIS (AP) -- European Aeronautic Defence and Space Co. on Saturday hailed its victory over arch-rival Boeing to secure a multibillion-dollar U.S. military contract and bounce back from setbacks that led to major company restructuring.

EADS, the maker of Airbus planes, and its U.S. partner, Los Angeles-based Northrop Grumman, won one of the biggest Pentagon contracts in decades Friday, worth an estimated US$40 billion (euro26 billion), to build 179 midair refueling planes.

"This is a formidable victory in the American market," EADS CEO Louis Gallois said on France-Info radio. "To beat Boeing in the American market, well, we're very proud."

The win, announced Friday in Washington, drew gasps at Chicago-based Boeing. It opens the door to the possibility of follow-up contracts for EADS. The win was the first of three U.S. awards worth up to US$100 billion (euro66 billion) over 30 years.

For Gallois, the award confirms the company's global strategy -- balancing defense and commercial sectors and increasing its presence in key markets, a statement said.

"This major selection is a win-win for our customers, for our allied industrial cooperation and for EADS," the statement quoted Gallois as saying.

The EADS-Northrop Grumman partnership won the competition in part because of the larger size of its aircraft -- the KC-30 tanker -- allowing for more fuel, more cargo and more passengers, Air Force Gen. Duncan J. McNabb said Friday.

The tanker frame is to be based on the Airbus A330 passenger jet, and final assembly will take place in Mobile, Alabama, according to EADS. Civilian Airbus A330 freighters will be assembled there, too.

"We are creating lots of jobs in the United States, but we're also creating (jobs) in Europe," Gallois said on France-Info. He did not provide figures.

Addressing concerns that the Alabama assembly site could spell more job cuts on this side of the Atlantic, Gallois, speaking on France-2 television, stressed that Europe will play a role in building the tanker, with the nose made in France, the wings in Britain and part of the fuselage in Germany.

For French President Nicolas Sarkozy, the award is a "historic success."

"After the difficulties of several months ago, EADS thus brilliantly renews with success ... and in one of the most difficult and demanding defense markets," a statement from the president's office said.

Sarkozy called Gallois to hail the deal, which underscores "the exceptional know-how of the European company, in civilian as well as defense" sectors, it said.

EADS has been weighed down by a series of problems, with the latest a delay announced in November to its A400M military transport jet. EADS said the delay could cost as much as euro1.4 billion (US$2 billion) in penalties and other charges. The slumping dollar has also been a drain.

However, the most high-profile problem dates to June 2005, with the start of a series of announcements that revealed botched management of the A380 superjumbo -- Airbus' rival to Boeing's 787 -- delaying delivery by nearly two years and hurting profits. Rolllout of Boeing's 787 has also been pushed back and is not due out until next year.

The Airbus crisis reached deep into the company structure, resulting in a change in top management and a restructuring plan that cuts 10,000 jobs and aims to recoup 2 billion euros (US$3 billion) in savings by 2010.

Many analysts predict a down U.S. market when compared with February of last year, with the Detroit Three taking the biggest hit, when automakers release their monthly sales results on Monday.