LONDON, April 25: A dollar rally against the euro on Friday lost momentum in late trade as investors took profits ahead of the weekend but analysts said more gains could come next week if the US signals a pause in its rate-cutting cycle.

The single European currency in late trade was at $1.5629 against $1.5684 late Thursday in New York. The euro had fallen to $1.5599 before staging a modest recovery.

The dollar meanwhile was at 104.21 yen after 104.22 yen on Thursday.

The US unit, which on Tuesday plunged to a record low beyond $1.60 to the euro, has since then benefited from speculation the US Federal Reserve’s expected rate cut next week may well be its last in the current cycle.

With equity markets steadier and a growing sense that the bulk of subprime-related writedowns by banks have been revealed, the Fed may opt for more caution over inflation.

“Given the recent stable movement on the global financial markets, receding concerns about the credit crunch and surging commodity prices, there is an emerging view that the Federal Reserve may end the rate-cutting cycle after one more rate cut,” Tokai Tokyo Securities chief economist Mitsuru Saito said.

In London on Friday, the euro changed hands at $1.5629 against $1.5685 late on Thursday, at 162.89 yen (163.50), 0.7883 pounds (0.7943) and 1.6151 Swiss francs (1.6237).

The dollar stood at 104.21 yen (104.22) and 1.0332 Swiss francs (1.0349).

The pound was at $1.9830 ($1.9744).

On the London Bullion Market, the price of gold slipped to $891.50 per ounce from $895.50 late on Thursday.—AFP