* Dollar gains on euro, yen as risk-filled week begins
* ECB's Weber says no growth for Germany until H2 2010
* Euro cuts gains vs dollar on Weber, ahead of ECB meeting
* U.S. bank stress tests, central banks on market radar
(Updates prices, adds comment, changes byline, dateline,
previous LONDON)
By Steven C. Johnson
NEW YORK, May 4 (Reuters) - The dollar edged up against the
euro and yen on Monday as investors took refuge in the currency
ahead of a bevy of central bank meetings this week and concerns
that some of the largest U.S. banks may need yet more capital.
The euro wobbled after Axel Weber, a council member at the
European Central Bank, said top euro-zone economy Germany won't
resume growth until the second half of 2010. For story see
[].
That left investors wary about Thursday's ECB meeting,
where officials are expected to cut interest rates to 1 percent
and possibly announce further steps, such as buying securities,
to stimulate lending and growth.
Central banks in Britain, Norway and Australia also meet
this week, while the United States will release on Thursday
stress test results for 19 top banks. Analysts said the market
fears some of the largest may be found to need more capital.
"This week is packed, with central banks, stress test
results on Thursday, U.S. employment data on Friday -- a lot of
different land mines that could trip people up," said Brian
Kim, currency strategist at UBS in Stamford, Connecticut.
All of that likely favors the dollar, he said, as investors
still see it as a safe haven in times of uncertainty. On the
other hand, he said if recent signs of economic stabilization
continue, the dollar may get a boost from those who think the
U.S. economy will lead the world economy out of recession.
Trading was volatile on Monday, with markets in Britain and
Japan closed for holidays. The euro was down 0.4 percent at
$1.3218 <EUR=>, reversing earlier gains after Weber's remarks.
It was flat at 131.40 yen <EURJPY=> while the dollar rose 0.3
percent to 99.40 yen <JPY=>.
Sterling fell 0.5 percent to $1.4847 <GBP=> after failing
overnight to breach the $1.50 level, with investors cautious
ahead of a Bank of England policy decision on Thursday.
The Australian dollar edged up 0.3 percent to $0.7327
<AUD=>. Australia's central bank meets Wednesday and is not
expected to cut interest rates from their current 3 percent.
Recent data showing signs of improvement in the economies
of the euro zone, China and India has helped bolster sentiment,
and signs of stabilization in the U.S. economy have also
improved investors' mood.
"Indicators have shown that the recession may not be over,
but at least the worst is over, and that is good news for the
riskier currencies like the Australian dollar," said
Commerzbank currency strategist Lutz Karpowitz in Frankfurt.
But analysts said a clearer indication of economic and
market conditions would come with this week, with the ECB
meeting and U.S. bank stress tests of particular interest.
"ECB officials have been candid in talking about their
differences in public, and Thursday is really D-Day for them,"
UBS' Kim said.
He said any indication that the bank will follow the U.S.
Federal Reserve and others and embrace quantitative easing --
the process of flooding a banking system with money to boost
lending -- would likely weigh on the euro.
(Additional reporting by Jessica Mortimer in London; Editing
by James Dalgleish)
