NEW YORK (AFP) — The dollar strengthened against the euro Monday as traders awaited publication of minutes from the last US Federal Reserve meeting to gauge if further interest rate cuts are in the pipeline.
Traders said dollar sentiment was boosted by confidence that global banks will be able to weather current jitters on world markets and by reports that European Union finance ministers are to press counterparts in the Group of Seven industrialized countries on steps to confront a credit squeeze.
The single European currency was at 1.5709 around 2100 GMT, down from 1.5736 late Friday in New York.
The dollar was at 102.37 yen, up from 101.45 on Friday.
Widespread speculation remains that the US Fed Reserve will lower its benchmark interest rate at an April 30 meeting, thereby making the dollar less attractive to investors.
Investors are expected to pore over the Fed minutes of its March meeting -- due Tuesday -- for clues on the future direction of monetary policy, particularly after a government report Friday showed the steepest job losses in March in five years.
At its March 18 session, the Fed lowered its key rate by three quarters of a percentage point to 2.25 percent, disappointing market expectations of a full-point reduction.
The Fed has now slashed the rate by three percentage points since September in a campaign to ease a credit crunch and stimulate a flagging economy.
"It's rather clear that the instability in the financial markets and the downside risks to growth were of major concern at the time, and a pronounced focus on these issues will lead investors to aggressively price in another round of rate cuts on April 30," Terri Belkas and John River, analysts at Forex Capital Markets, wrote in a client note.
"People are expecting the Fed to cut interest rates by another half point at its next meeting," said Mic Mills, a trader at TradIndex.com.
With interest rates in the eurozone expected to be on hold at 4.00 percent for the time being, the differential would "make the euro a good buy," Mills said.
Analysts also said traders were cheered Monday by reports that finance ministers from Britain, France, Germany and Italy will press counterparts from Canada, Japan and the United States to launch a coordinated effort to control a credit crisis, brought on by the meltdown in the US subprime, or high-risk, mortgage sector.
The G7 ministers are to hold a finance meeting Friday in Washington, on the eve of the spring meetings of the International Monetary Fund and the World Bank this weekend.
In late New York trade, the dollar stood at 1.0130 Swiss francs, up from 1.0058 late Friday.
The pound was at 1.9880 dollars, down from 1.9930.
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