Key US rates are now targeted in a range of zero to 0

The dollar rose 0.4 percent to 89.15 yen JPY while arise in price of oil boosted the Canadian dollar CAD. SENTIMENT STILL FRAGILE How long the sunnier mood would persist was less clear,analysts said. Banks, retailers and manufacturers announcedthousands of job cuts on Monday and worries about globaleconomic health remained acute ID:nLQ186557. A Group of 20 official told Reuters the InternationalMonetary Fund will slash its 2009 world growth forecast to 0.5percent from 2.2 percent ID:nLAD002983. "Sentiment is still quite shaky, and at the first sign ofbad news, people are prepared to run for the hills again," saidDavid Watt, senior currency strategist at RBC Capital Marketsin Toronto. Markets took heart from data showing sales of existing U.S.homes rose 6.5 percent last month, beating market forecasts,though some said the report also included troubling news. "Some 45 percent of sales were foreclosures or heavilydelinquent.

That suggests more price erosion, which will keep alid on consumer spending," said Brian Dolan, chief currencystrategist at Forex in Bedminster, New Jersey. Earlier, sterling was pressured after Bank of EnglandMonetary Policy Committee member David Blanchflower was quotedon Sunday as saying British interest rates still had a way togo if they were to follow the United States ID:nLO542246. Key US rates are now targeted in a range of zero to 0.25percent British rates are at 1.5 percent The European Central Bank seems more reticent. Yves Mersch,an ECB governing council member, told the Financial Times in aninterview published Monday that he did not want to see ratesfall much below the current 2 percent ID:nLQ61697. BNP Paribas currency strategist Ian Stannard said "themarket has yet to adjust to a more severe slowdown in the eurozone," adding that widening euro-zone credit spreads would alsohamper the single currency. The Fed begins a two-day policy meeting on Tuesday, andwith rates already near zero, traders will watch the centralbank's policy statement for pointers on what assets the Fed maypurchase to ease credit strains, analysts said. (Additional reporting by Jessica Mortimer in London;Editing by Diane Craft) Currencies.

recession will leadNorth American companies to slam the breaks on sponsorshipspending in 2009, especially for sports, leading to the smallestgrowth rate since tracking firm IEG began studying such data. North American companies are expected to increase spendingon sports, arts, cause and entertainment marketing by just 2.2percent to $16.97 billion, according to Chicago-based IEG, whichis owned by advertising giant WPP Plc (WPP.L) Last year,spending rose 11.4 percent to $16.61 billion. In a report obtained by Reuters on Monday, IEG said that noother downturn in the past 20 years has had such a negativeimpact on the outlook for industry spending, adding thatspending even rose 3.7 percent in 2002 after the Sept 11attacks on the World Trade Center and the Pentagon. "It is precisely the uncertainty and instability of thecurrent situation that has sponsors holding tighter to pursestrings than ever before, not knowing whether the economy isnear bottom or whether tight credit, lackluster consumerspending and the threat of more corporate collapses will extendthis recession through and beyond next year," IEG said in itsreport. "Sponsorship professionals can take some comfort in the factIEG is projecting even a small increase," it added.

In comparison, overall media spending is expected to fall by3 to 5 percent this year, according to estimates by variousadvertising industry executives Sports will feel the biggest hit, IEG said "Conventional wisdom ... up until now has viewed sportsdeals as the safe bets to turn to and kept investment in sportssponsorships steadily growing at a rapid pace," IEG said. "Suchthinking apparently has been trumped at many companies by themore basic need to save money." SPORTS WEAKNESS Major sports marketers from General Motors Corp GM.N toFedEx Corp (FDX.N) and Deutsche Post AG's (DPWGn.DE) DHL unithave cut spending on such sponsorships, as well as advertising,due to the recession. Last year, the sports industry's sponsorship spending growthrate was nearly 15 percent almost double the next-closestcategory but it is projected to have the smallest increase in2009, IEG said. Sports makes up 68 percent of the projected 2009total, down one percentage point from the previous year.