The dollar rose against the euro and the yen on speculation the Federal Reserve will signal tomorrow that it's going to pausing interest-rate cuts. The U.S. currency headed for its first monthly advance versus the yen and euro since December as traders increased bets the Fed will stop reducing rates after a quarter-percentage point cut tomorrow. 'There is speculation the U.S. interest-rate cuts will end soon and the dollar will rebound,' said Norifumi Yoshida, vice president of the trading section in Singapore at Mizuho Corporate Bank Ltd., Japan's third-largest bank. 'There is a risk of euro declines in the near term.' The dollar is currently trading at$1.5567 per euro at 7:34 GMT from $1.5657 in New York yesterday, bringing gains this month to 1.1 percent. It traded at 104.24 yen compared with 104.19 yen yesterday, when it matched a two-month high of 104.82 yen. The euro traded at 162.71 yen, after closing at 163.11. The euro may fall to around $1.5480 this week, Yoshida said.

Confidence among U.S. consumers probably fell this month to the lowest level in more than 14 years as Americans fretted over jobs, record gasoline prices and falling home values, economists said before a report today. The Conference Board's confidence index probably fell to 61, the lowest since October 1993, from 64.5 in March, according to the median estimate in a Bloomberg News survey of 67 economists. A separate report will show property prices continued to drop in February. The Federal Reserve will probably announce a 25 basis points rate cut on Wednesday to 2%, this will be the seventh rate cut since august last year, pointing out to concerns over the US economic slowdown.

Even though for some experts there still is the possibility of a surprising decision, the fear of entering a recession later this year, as Ben Bernanke recently warned, will probably turn the balance to the rate cut side though. The US has suffered 232,000 job losses in the first quarter, and the University of Michigan Consumer Sentiment Index has slumped to all time low. The main point of Wednesday's event, will be the Bank's statement, hints for affirmations about this rate cut to be the last one for a while, will be of special interest, as further rate cuts could fuel inflation to rather excessive levels and push the dollar to new lows, therefore, in case the odds are met, the Fed could leave interest rates at such low levels for the rest of this year, and the beginning of next one.

Bank of England (BOE) Governor Mervyn King will testify before the Treasury Select Committee regarding his reappointment as Governor. As head of the central bank's governing body, which is responsible for setting the nation's short term interest rate, his speeches will cause market volatility as traders react to clues regarding future monetary policy. The BOE is expected to cut the interest rate by 25 bases points. GBP/USD currently trading at 1.9841 7:59 GMT.