News: FOREX-Euro gains on hopes of German fiscal stimulus

• Report that Germany may circumvent debt rules to boost spending
• ECB expected to ease at Thursday's meeting

(Adds pound, updates prices)

The euro rose on Monday after a report that Germany may boost fiscal stimulus increased hopes that governments will act to boost growth in the region, though expectations of further central bank easing kept a lid on gains.

Germany is considering the creation of a "shadow budget" that would allow Berlin to boost public investment above and beyond limits set by its strict national debt rules, three people familiar with the internal discussions told Reuters.

“A key part of that coalition is the commitment to keep balanced budgets. If they are waiving from that it could be very supportive for the euro and very bearish for the dollar,” said Bipan Rai, North American head, FX strategy at CIBC Capital Markets in Toronto.

The euro EUR= gained to $1.1051 against the greenback, up 0.22% on the day, after earlier trading as low as $1.1014.

Euro gains were capped, however, before the European Central Bank’s meeting on Thursday, when the central bank is expected to introduce a new wave of monetary stimulus.

"The default is to be negative euro into ECB," said Kenneth Broux, head of corporate research at Societe Generale.

The euro may get a boost, however, if the ECB disappoints dovish expectations already baked into the market.

“We get the sense the market is expecting a bit too much of a dovish outcome this week and if that is the case that could imply that tactical long euro positions might do well,” Rai said.

In the United States, consumer price inflation data on Thursday and retail sales data on Friday are the main economic focus. They will come after Friday's jobs report showed that U.S. jobs growth slowed more than expected in August.

The Federal Reserve will continue to act "as appropriate" to sustain the U.S. economic expansion, Fed Chair Jerome Powell said on Friday in Zurich, bolstering expectations for a rate cut at the Fed's meeting on Sept. 18.

Sterling rallied to six-week highs on hopes that Britain will not crash out of the European Union without a deal, and after data showed Britain's economy picked up more than expected in July.

It briefly pared gains after House of Commons Speaker John Bercow said he would stand down.

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	Currency bid prices at 3:03PM (1903 GMT) 

 Description	  RIC		 Last		   U.S. Close  Pct Change	 YTD Pct	 High Bid	Low Bid 
											  Previous				   Change				  
											  Session											
 Euro/Dollar	  EUR=		$1.1051		$1.1027	 +0.22%		 -3.64%	  +1.1067	 +1.1016 
 Dollar/Yen	   JPY=		107.1600	   106.9000	+0.24%		 -2.81%	  +107.1700   +106.7800 
 Euro/Yen		 EURJPY=	 118.43		 117.86	  +0.48%		 -6.16%	  +118.5000   +117.7500 
 Dollar/Swiss	 CHF=		0.9915		 0.9872	  +0.44%		 +1.03%	  +0.9918	 +0.9875 
 Sterling/Dollar  GBP=		1.2345		 1.2281	  +0.52%		 -3.23%	  +1.2382	 +1.2235 
 Dollar/Canadian  CAD=		1.3159		 1.3170	  -0.08%		 -3.51%	  +1.3184	 +1.3139 
 Australian/Doll  AUD=		0.6864		 0.6846	  +0.26%		 -2.62%	  +0.6876	 +0.6837 
 ar																							  

 Euro/Swiss	   EURCHF=	 1.0961		 1.0888	  +0.67%		 -2.60%	  +1.0962	 +1.0890 
 Euro/Sterling	EURGBP=	 0.8950		 0.8973	  -0.26%		 -0.38%	  +0.9014	 +0.8905 
 NZ			   NZD=		0.6425		 0.6425	  +0.00%		 -4.35%	  +0.6444	 +0.6414 
 Dollar/Dollar																				   

 Dollar/Norway	NOK=		8.9259		 8.9740	  -0.54%		 +3.32%	  +8.9922	 +8.9133 
 Euro/Norway	  EURNOK=	 9.8648		 9.8975	  -0.33%		 -0.42%	  +9.9085	 +9.8513 
 Dollar/Sweden	SEK=		9.6541		 9.6427	  +0.32%		 +7.70%	  +9.6695	 +9.6333 
 Euro/Sweden	  EURSEK=	 10.6700		10.6362	 +0.32%		 +3.96%	  +10.6785	+10.6241