The euro remained broadly stable yesterday ahead of key central bank meetings today at which the European Central Bank (ECB) and the Bank of England will decide whether to raise interest rates. Most analysts expect that rates in both the euro zone and Britain will remain on hold - but only for a few weeks.

Earlier this week the US Federal Reserve left rates on hold but moved to a "tightening" bias. Most analysts think it will raise rates on November 16th when it meets again.

According to Mr Jim Power, chief economist at Bank of Ireland, rate rises in Europe are also more likely later this month or next month. However, increases today are still possible.

The Bank of England monetary policy committee may hold fire, particularly after raising rates in September.

Figures have continued to be strong, providing the committee with an excuse to justify a rise. One factor which may weigh against a decision to raise rates is the strength of sterling, which is already having a dampening effect on the economy.

Nevertheless, keeping rates on hold may be seen as simply postponing the inevitable, as they will eventually have to rise from their current 5.25 per cent, according to Mr Power.

It is also possible that today's ECB meeting will produce a rate rise and, for some analysts, more likely than not.

This marks a big turnaround in thinking over just a couple of weeks. In that time, the ECB's chief economist, Mr Otmar Issing, and president Mr Wim Duisen berg have joined the French vice-president in hinting at rate rises. There is no question but that they are setting the market up for a rise. The only question is when.

According to Mr Allen Saunderson, of the Frankfurt Money Strategist, there is now a 70 per cent likelihood of a rate rise today. He said the ECB wanted to err on the side of caution in order to enhance its credibility.

There is still a question about whether German domestic circumstances justify any rise yet. The Bundesbank would appear to think not. News yesterday that orders for German goods rose by 5.1 per cent in August from July, with foreign orders up 8.1 per cent, demonstrated that the weakness of the euro is benefiting German industry.

Mr David Brown, a European economist at Bear Stearns in London, said the data confirmed his view that a rate rise will come soon. "We have runaway growth tendencies under way in the euro zone," he said.

"If there are any sceptics lurking around about the ECB's propensity to hike rates soon, all they need to do is take a good hard look at the German orders data from today," he added.

If the council members voted with domestic imperatives in mind, it is likely that 13 out of the 17 would vote for a rate rise, with only the Germans and Italians demurring. Of course all are meant to vote with a euro-wide view in mind.

After today the markets will be closely watching data, particularly from the US, beginning with the employment report due out tomorrow.