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FX round-up: Risk appetite helps dollar

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Date: Tuesday 08 Apr 2008

LONDON (ShareCast) - The dollar rose against the euro and the yen on Monday as it tracked gains in the global market.

Analysts said the greenback benefited from a renewed appetite for riskier trades now that markets have digested Friday’s gloomy jobs report.

Good gains in Asian and European markets boosted optimism that the worst effects of the credit crunch may be over.

The dollar also gained ahead of the European Central Bank policy meeting on Thursday making traders hesitant about buying the euro.

Caution ahead of G7 meetings later in the week also dampened euro buying.

The longer-term outlook for the dollar however seems less than solid, analysts believe, with expectations increasing that the Federal Reserve will cut interest rates again.

Sterling remained steady against major currencies Monday.

Most economists expect the Bank of England to cut interest rates at their meeting this Thursday by a quarter percentage point to 5% amid continuing signs of a weakening economy.

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