Gulf Arab oil producers could revalue their currencies together if the US dollar weakens further, with appreciations of 8 percent in the UAE dirham and Saudi riyal likely before April, Standard Chartered said.

Markets piled pressure on Gulf currencies last year as speculation mounted that more Gulf Cooperation Council countries would follow Kuwait and abandon links to the weak dollar partly to curb imported inflation. Kuwait ditched the peg in May.

"It seems likely that GCC countries will maintain their dollar pegs," Standard Chartered said in a note on Wednesday.

"However, if we see further dollar weakness against the majors a coordinated revaluation by the GCC is possible," it said.

The bank said it expected GCC revaluation expectations to pick-up ahead of the US Federal Reserve meeting on January 30.

Dollar pegs force the region to shadow US interest rates at a time when the Federal Reserve is cutting rates to contain a credit crisis and inflation is running at decade highs across the Gulf.

The majority of Wall Street firms expect the Federal Reserve to opt for an aggressive 50 basis point interest rate cut at the policy meeting later this month, a Reuters poll showed on Friday.  -Reuters