FOREX-Dollar gains on solid retail sales, before Fed meeting

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(Updates prices)

By Karen Brettell

NEW YORK, June 14 (Reuters) - The dollar index climbed toits highest in almost two weeks on Friday after encouragingretail sales data for May released ahead of a Federal Reservepolicy meeting next week eased fears that the U.S. economy isslowing sharply.

The dollar index against a basket of currencies .DXY waslast 97.35, up 0.53% on the day and the highest since June 3.

The dollar has recovered in the last week from a weak startto June, as investors consider whether expectations for U.S.interest rate cuts have gotten too far-fetched relative to thedata.

With international economic growth slowing, investors arenervous that U.S. President Donald Trump will impose tariffs onJapan and Europe, which could result in more dovish centralbanks globally and give the dollar a relative advantage.

The U.S. economy is also seen as better placed to handletrade tensions than other countries.

The dollar "has benefited to date from negativeglobalization news as the domestic side of the U.S. economy haslooked sufficiently robust to deal with trade-relatedheadwinds," Morgan Stanley analysts said in a report on Friday.

"Other countries look less resilient in the face of tradetensions due to higher exposure to global import demand,dependence on manufacturing exports, and underdeveloped domesticdemand," they said.

Chinese data on Friday flashed more warning signs, withindustrial output growth unexpectedly slowing in May to a morethan 17-year low and investment cooling, underlining a need formore stimulus. urn:newsml:reuters.com:*:nL4N23L1WS

The Fed is not widely expected to lower rates when it meetson June 18-19, though investors will watch for new signals thata cut by the U.S. central bank may come in July.

Interest rate futures traders are pricing in a 23% chance ofa cut in June, and an 87% likelihood of at least one cut inJuly, according to the CME Group's FedWatch Tool. The other major catalyst for the dollar in the near term iswhether the United States and China will renew tradenegotiations at the G20 summit on June 28-29.

Trump said on Friday it didn't matter if Chinese PresidentXi Jinping attends the summit, adding that China wouldeventually make a trade deal with the United States. urn:newsml:reuters.com:*:nW1N22402Q


Currency bid prices at 1:58PM (1758 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session Euro/Dollar EUR= $1.1209$1.1275 -0.59% -2.27% +1.1289 +1.1203 Dollar/Yen JPY= 108.5300 108.3700 +0.15% -1.57% +108.5800 +108.1700 Euro/Yen EURJPY= 121.66 122.20 -0.44% -3.61% +122.2700 +121.5900 Dollar/Swiss CHF= 0.9986 0.9936 +0.50% +1.75% +0.9995 +0.9926 Sterling/Dollar GBP= 1.2591 1.2672 -0.64% -1.30% +1.2682 +1.2589 Dollar/Canadian CAD= 1.3403 1.3324 +0.59% -1.72% +1.3407 +1.3323 Australian/Dollar AUD= 0.6863 0.6913 -0.72% -2.64% +0.6918 +0.6862 Euro/Swiss EURCHF= 1.1196 1.1205 -0.08% -0.51% +1.1227 +1.1196 Euro/Sterling EURGBP= 0.8901 0.8896 +0.06% -0.92% +0.8917 +0.8891 NZ Dollar/Dollar NZD= 0.6488 0.6567 -1.20% -3.41% +0.6573 +0.6489 Dollar/Norway NOK= 8.7145 8.6777 +0.42% +0.88% +8.7210 +8.6631 Euro/Norway EURNOK= 9.7683 9.7899 -0.22% -1.39% +9.7968 +9.7696 Dollar/Sweden SEK= 9.4864 9.4814 -0.55% +5.83% +9.4992 +9.4240 Euro/Sweden EURSEK= 10.6363 10.6950 -0.55% +3.63% +10.7123 +10.6260

(Editing by Bernadette Baum and James Dalgleish) ((Karen.Brettell@thomsonreuters.com; +1 646 223 6274; ReutersMessaging: karen.brettell.reuters.com@reuters.net))

This article appears in: Politics , Stocks , World Markets
Referenced Symbols: EFX ,

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