Last week started with optimism after BoJ’s decision to expand its credit program; following was the ECB’s rate decision and vows for price stability to support the continent’s growth, which came after the preliminary GDP reading that was revised to the upside as exports surged along with rising investment spending.

The ECB decided to preserve interest rates at 1.00 percent, the lowest since the bank was established, and unchanged to the seventeenth consecutive month, aiming to support growth in the continent that initially started during the final quarter of 2009.

In the press conference that follows interest rates, ECB Chairman, Juan Claude Trichet raised growth projections for this year to 1.6 percent, compared with the earlier projected 1.0 percent. As for next year, ECB expects the economy to grow by 1.4 percent, compared with the prior 1.2 percent projected in June.

Trichet stated that “The governing council has today also decided to continue to conduct its main refinancing operations (MROs) and its special-term refinancing operations with a maturity of one maintenance period as fixed rate tender procedures with full allotment for as long as necessary, and at least until the end of this year’s twelfth maintenance period on 18 January 2011.”

The European economy managed to improve, supported by the decline in the value of the euro against majors, especially the dollar, where the Euro traded at four-year low against the dollar during the second quarter of this year, which helped spur demand on European goods and increase exports to support growth in the continent.

Markets benefited from the rise in confidence that covered the European continent during August, which marked the highest in nearly two-years. China’s manufacturing sector expanded more than expected in August, slashing doubts that economic slowdown in global super economies might topple economic recovery.

Europe’s expansion was subject to upside revision for the second quarter of this year, reaching 1.9 percent on the yearly compared with the previous estimate of 1.7 percent. The economy expanded by 1.0 percent during the second quarter, compared with the previous quarter.

The services sector in Euro-Zone witnessed rising activities during the past month, while noting that Germany, which is considered Europe’s biggest economy, witnessed slowdown in economic conditions within the services sector.

UK’s services sector also witnessed a slump, reaching 51.3, but overall, it is still considered an expansion where 50.0 is the dividing line between expansion and contraction. Still fears hover around the futures for UK with the spending cuts and the downside revision for growth projections by the BoE, and as we know services is the pillar of the UK economy and crumbling in that sector will only add more downside pressure on the outlook.

Germany’s unemployed retreated during August to the lowest level l in nearly 14-months, after exports surged and investment sector recovered during the second quarter of this year. German expanded by 2.2 percent during the second quarter of this year.

The German economy led the recovery in the European continent after exports and rising investment spending pushed employers to hire again in order to cope with rising demand, accordingly, supporting spending that witnessed a rise in the second quarter of this year, which marked the highest in nearly two-years.

Nevertheless, with rising number of employed people in Germany, unemployment rate remained unchanged at the highest level in 12-years, at 10.0 percent, affected by Europe’s sovereign debt problems along with huge budget deficits in major economies in the continent. But conditions in Germany are improving at a noticeable pace and better than other neighboring countries, where Spain’s unemployment rate in the second quarter of this year reached 20.0 percent.