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Euro up on dollar ahead of crucial ECB meeting

The euro rebounded from three-month lows against the dollar but remained relatively weak ahead of next week's key meeting of the European Central Bank.

NEW YORK: The euro rebounded from three-month lows against the dollar on Friday but remained relatively weak ahead of next week's key meeting of the European Central Bank (ECB).

The euro pushed to $1.3630 from the $1.36 line on Thursday, but still remained far below its recent peak over $1.39.

A report on US consumer spending in February, showing a minor contraction, disappointed but was mostly dismissed by economists who pointed to a large jump the month before.

"It is obvious that after an unseasonably colder January and February consumers came out with a vengeance in March. So, April's poor showing on the spending front is payback for a strong March," said Chris Christopher, director of consumer economics at IHS Global Insight.

The euro's fate remained hinged on how much action the ECB will take in its June 5 policy meeting to shore up growth and fight disinflation in the Eurozone.

The Frankfurt-based central bank has already signalled that it was comfortable with easing monetary conditions, hinting at a possible interest rate cut and more when it meets next Thursday.

The yen was flat on the dollar but lower against the euro.

Data showed on Friday that the Japanese economy stumbled in April following the sales tax hike, and the International Monetary Fund warned that aggressive monetary easing "may need to be maintained for an extended period."

The Bank of Japan "should act quickly if actual or expected inflation stagnates or growth disappoints," the International Monetary Fund said.

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