Euro loses recent gains amid swine flu worries, ECB rates

Dubai: The Fed ends a two-day meeting on Wednesday and as rates are already near zero, markets will be looking for any extension of quantitative easing and will focus on the central bank's economic outlook amid signs that a downturn is easing.

Investors will remain wary of taking on risk this week, boosting the dollar, amid a slew of data including a key job market report, the release of the results of stress tests for the US banking sector, and policy meetings by the European Central Bank (ECB) and Bank of England.

Risk Appetite has increased on a note of optimism from the US Fed and supportive economic data. Analysts said it may be too soon for investors to reverse bets on the greenback in favour of the euro and higher yielding currencies such as the Australian and New Zealand dollars.

The euro started the week erasing most of the previous week gains which came after the closely-watched German Ifo survey showed business confidence improving more than expected. This boosted hopes that the euro-zone economy may be over the worst. The euro was under pressure as investors were worried about the spread of swine flu, and after ECB's Jean Claude Trichet mentioned on Sunday that the bank is likely to cut its key interest rate from 1.25 per cent to 1 per cent.

Range for previous week: $1.2455-$1.3301 (Dh4.5747 Dh4.8854)

Range for this week: $1.2962-$1.3384 (Dh4.7610 Dh4.9173)

The sterling fell against the dollar on Monday, weighed down by ongoing concerns about the country's ballooning debt. The pound decline was also exacerbated by concerns that an outbreak of swine flu would dampen a global economic recovery

Range for previous week: $1.4251-$1.4872 (Dh5.2343 Dh5.4625)

Range for this week: $1.4513-$1.4947 (Dh5.3299 Dh5.4910)

The bank of Japan kept interest rates on hold on Thursday. Japan's economy has slowed down in its worst recession since the Second World War and a 3.2 per cent slump in the fourth quarter of 2008 is expected to have contracted even more in the first quarter of this year, despite some early tentative signs of recovery in exports.

Range for previous week: 95.93 99.12 yen (Dh0.03706 Dh0.03829)

Range for this week: 95.59 99.58 yen (Dh0.03687 Dh0.03843)