The dollar edged up against the euro and yen on Monday as investors took refuge in the currency ahead of a bevy of central bank meetings this week and concerns that some of the largest U.S. banks may need yet more capital. The euro wobbled after Axel Weber, a council member at the European Central Bank, said top euro-zone economy Germany won't resume growth until the second half of 2010. That left investors wary about Thursday's ECB meeting, where officials are expected to cut interest rates to 1 percent and possibly announce further steps, such as buying securities, to stimulate lending and growth. Central banks in Britain, Norway and Australia also meet this week, while the United States will release on Thursday stress test results for 19 top banks. Analysts said the market fears some of the largest may be found to need more capital. "This week is packed, with central banks, stress test results on Thursday, U.S. employment data on Friday -- a lot of different land mines that could trip people up," said Brian Kim, currency strategist at UBS in Stamford, Connecticut. All of that likely favors the dollar, he said, as investors still see it as a safe haven in times of uncertainty. On the other hand, he said if recent signs of economic stabilization continue, the dollar may get a boost from those who think the U.S. economy will lead the world economy out of recession. Trading was volatile on Monday, with markets in Britain and Japan closed for holidays. The euro was down 0.4 percent at $1.3218, reversing earlier gains after Weber's remarks. It was flat at 131.40 yen while the dollar rose 0.3 percent to 99.40 yen. Sterling fell 0.5 percent to $1.4847 after failing overnight to breach the $1.50 level, with investors cautious ahead of a Bank of England policy decision on Thursday. The Australian dollar edged up 0.3 percent to $0.7327. Australia's central bank meets Wednesday and is not expected to cut interest rates from their current 3 percent. Recent data showing signs of improvement in the economies of the euro zone, China and India has helped bolster sentiment, and signs of stabilization in the U.S. economy have also improved investors' mood. "Indicators have shown that the recession may not be over, but at least the worst is over, and that is good news for the riskier currencies like the Australian dollar," said Commerzbank currency strategist Lutz Karpowitz in Frankfurt. But analysts said a clearer indication of economic and market conditions would come with this week, with the ECB meeting and U.S. bank stress tests of particular interest. "ECB officials have been candid in talking about their differences in public, and Thursday is really D-Day for them," UBS' Kim said. He said any indication that the bank will follow the U.S. Federal Reserve and others and embrace quantitative easing -- the process of flooding a banking system with money to boost lending -- would likely weigh on the euro.

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