NEW YORK (Reuters) - The dollar is poised to extend its upward trend next week as investors brace for a new round of interest rate cuts in Britain, Australia and Norway and more evidence of economic malaise around the world.

The United States, of course, remains on the front lines of an increasingly virulent global recession, with the economy shrinking last quarter at its fastest clip in nearly 27 years.

And while more bad US news is on the way — data on Friday is likely to reveal that employers slashed more than 500,000 jobs in January — analysts hope aggressive US monetary and fiscal policy will help the economy start to recover around year-end.

Whereas the Federal Reserve has already brought interest rates to zero and expanded its balance sheet, central banks from other advanced economies still have more monetary easing to do, which analysts say should weigh on their currencies.

The Bank of England is widely expected to cut rates to a fresh record low of one percent on Thursday, from the current 1.5 percent, while its counterparts in Australia and Norway are also expected to ease policy to boost struggling economies.

"The dominant theme is going to continue to be monetary policy conversion toward zero, and that theme should keep the dollar stronger overall," said Vassili Serebriakov, senior currency strategist at Wells Fargo in New York.

Markets will also be on alert for word from the Obama administration regarding a "bad bank" to soak up toxic assets from the balance sheets of troubled banks.

Bank of New York-Mellon strategist Michael Woolfolk said such a plan may help the dollar by bolstering the argument that proactive measures will help the US economy recover.

The European Central Bank also meets on Thursday, though President Jean-Claude Trichet has been at pains to convince the market not to expect an interest rate move until March.

The ECB cut rates to two percent at its last meeting, the lowest they have ever been in the euro's 10-year history, but since then, economic data has continued to deteriorate sharply. Greece, Spain and Portugal have all endured credit downgrades.

"They probably will not move this week, but that won't help the euro, in our view," Serebriakov said. "It's probably just delaying the inevitable. People are questioning their logic."

The euro was on track to lose more than eight percent against the dollar in January, its worst month since October, as dismal euro-zone economic data has helped push investors into the relative safety of the dollar.

This week, investors will keep an eye on euro-zone producer price data and a German retail sales report tomorrow.

Strategists at Brown Brothers Harriman said the euro may get a boost early in the week ahead of what's universally expected to be another dreadful US jobs report on Friday.

But provided the data doesn't prove dramatically weaker than already expected, they said the dollar will likely rally after the data, adding that dollar declines should be seen as buying opportunities.

On emerging market currencies, investors should tread carefully. "Emerging markets overall remain vulnerable to waves of selling, and so even those countries with decent fundamentals won't be safe," BBH writes in a research note.

Against the yen, the dollar has appeared to consolidate in a tight range of roughly 89-90 yen, and analysts say signs of increasing economic weakness in Japan may help slow the yen's rapid gains against the dollar and euro.