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By Staff
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TOKYO, Mar 6 (Reuters) The dollar struck one-month lows against the euro and the Swiss franc on Monday as growing expectations that the European Central Bank will keep boosting interest rates encouraged investors to buy European currencies.

The euro climbed around 2 percent against the dollar last week, getting an added boost after the ECB raised interest rates to a three-year high and its chief, Jean-Claude Trichet, revised up his inflation forecasts for 2007.

The dollar also stayed under pressure against the yen from growing expectations that the Bank of Japan will scrap its super-loose monetary policy as soon as its meeting that ends on Thursday.

Trade was quiet as dealers were cautious about placing big bets ahead of the meeting, traders said.

''The market believes the end of quantitative easing is imminent,'' said a trader at a Japanese bank. ''But some top government officials could voice objections to it and people are watching out for such comments.'' The dollar has been weighed down by expectations the BOJ would soon end its ''quantitative easing'' policy of flooding the banking system with excess cash and eventually raise interest rates before the year is out.

In early Asian trade, the euro was buying $1.2075, up 0.3 percent from the level in late New York trade on Friday. It climbed as high as $1.2094 on electric trading platform EBS, a one-month peak.

The dollar was at 1.2925 Swiss francs after slipping to a one-month low around 1.2900 francs.

The U.S. currency was little changed at 116.55 yen.

Besides the BOJ, central banks in Canada, Australia, England and New Zealand are due to hold policy-setting meetings this week, with only the Bank of Canada expected to adjust interest rates.

The Bank of Canada is widely expected to boost rates by 25 basis points to 3.75 percent on Tuesday.

The Canadian dollar was at 1.1350 per U.S. dollar, not far off the 14-year high around C$1.1290 hit last week.

REUTERS VJ RAI0645

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