* Norwegian crown jumps on price data
* New Fed chief with dovish history to testify in Congress
* Weak U.S. jobs data fails to deter Fed taper expectations
* Bank of England has chance to tweak guidance on Wednesday
By Patrick Graham
LONDON, Feb 10 Norway's crown stood out among
G10 currencies on Monday, jetting almost 1 percent higher
against the euro and dollar after higher than expected inflation
was read as eliminating the chances of an interest rate cut.
The dollar, euro and yen were all broadly steady at the
start of what may prove an important week for the timing of
central bank policy moves in Britain and the United States.
The new head of the U.S. Federal Reserve, Janet Yellen,
testifies in Congress after a second month of softer jobs data
for which most investors seem to be blaming the weather rather
than any weakening of economic recovery.
Yellen, long a supporter of the Fed's ultra-loose policy,
must walk a line between maintaining enough support for the
recovery and not spooking markets convinced the U.S. central
bank will cease buying bonds by the end of this year.
That "tapering" is behind this year's main trend so far - a
flood of money out of emerging economies and into the developed
world and supporting the euro, dollar and yen, among others.
But that flow, possibly allied to the doubts over the pace
of the U.S. recovery, has helped hold off the surge for the
dollar that many have forecast and kept major currencies in
tight ranges over recent weeks.
"Yellen likely will signal the Fed's intention to continue
tapering, without sounding especially alarmed about the softer
payroll reports of the past two months," analysts from French
bank BNP Paribas said in a note.
"We remain constructive on the USD, but recognise that it
may struggle to regain momentum in the immediate future."
Georg Von Wowern from Scandinavian bank Nordea said Norway's
central bank would look past the inflation numbers, which were
influenced by post-Christmas sales.
But he said the crown, which fell almost 15 percent last
year against the euro, had been looking oversold and
may have room to regain more ground.
"We continue to think the crown is vulnerable, but there is
the possibility of more of a correction in the short term."
Norway's oil reserves have made its economy and assets
pretty secure bets for years. But some analysts say bigger
international investors who used it as a safe haven from the
euro zone crisis in 2010-11 found its markets too thin to absorb
the extra capital - or its withdrawal - easily.
"The current combination of lower risk appetite and global
policy tightening is likely to weigh on the crown," said Ian
Stannard, strategist with Morgan Stanley in London.
"We expect NOK to be an underperformer in 2014, with EUR/NOK
ending the year at 8.55."
The currency gained 0.9 percent against the euro after the
inflation numbers to trade at 8.3520 crowns per euro.
In Britain, an inflation report on Wednesday gives Bank of
England Governor Mark Carney another chance to convince markets
the bank's forecast that interest rates will be on hold well
into 2015 are credible.
Analysts are split on whether Carney will formally tweak the
bank's forward guidance on policy and whether it will work in
pushing back market expectations for when rates will rise.
"There appears scope for UK short rates to decline and this
is something that can also weigh on sterling," RBS strategist
Paul Robson said. "However, we do not expect much