* Dollar under pressure near five-week low ahead of Federal
* European shares boosted by M&A activity
* Nikkei plumbs four-week lows, other Asian markets also
* Data, Fed, ECB, Bank of England meetings pose hurdles this
By Marc Jones
LONDON, July 29 Expectations that the Federal
Reserve will this week emphasise plans to keep U.S. interest
rates near zero left the dollar at a five-week low on Monday,
while concerns about China's stuttering economy pressured
The Federal Reserve, the European Central Bank and the Bank
of England meet this week. All are expected to repeat or refine
their "forward guidance" that borrowing costs will remain
extraordinarily low as long as growth is sub-par and inflation
is not a threat.
The dollar which shed 1.2 percent last week for its
third straight weekly loss, remained under pressure at 81.615 as
European trading gathered momentum having earlier hit a one
month low against the yen.
"The dollar faces a lot of key event risk in the week ahead
with the release of the U.S. Q2 GDP report and latest FOMC
policy meeting on Wednesday followed by the release of the U.S.
employment report for July on Friday," said Lee Hardman,
currency strategist at Bank of Tokyo Mitsubishi.
Two more giant merger deals, this time in the media and
pharmaceuticals sectors, added to a flurry of M&A activity in
recent weeks to keep European stock markets
The FTSEurofirst 300 index of top European shares
was up 0.6 percent at 1,212 points by 0745 GMT, with London,
Frankfurt and Paris 0.5-0.6 percent higher.
In contrast, commodities markets were mostly softer, with
both oil and growth-attuned copper at or near
three-week lows. For crude it was demand worries that weighed,
while Chinese manufacturing data on Thursday hit copper.
Asian stocks also saw a poor start to the week as investors
braced for another round of disappointing economic news out of
China. Japan's Nikkei hit a four-week low as those jitters were
compounded by a stronger yen.
"A sense of caution is looming in the market, especially
because investors are worried about a slowdown in the Chinese
economy. And when they see a risk in Asia, they tend to buy the
yen, and the Japanese market is hit by that," said Kyoya
Okazawa, head of global equities at BNP Paribas.
In debt markets, German Bund futures edged up in thin trade
and euro zone periphery bonds eased, but investors refrained
from placing big bets before this week's monetary policy
decisions and data.