The dollar held gains against the yen and euro from the end of last week before U.S. data on retail sales today that may add to the case for the Federal Reserve to reduce monetary stimulus.
The Bloomberg Dollar Index last week posted its first drop in a month after Fed Chairman Ben S. Bernanke signaled that bond buying won’t be dialed back soon. He is scheduled to speak on monetary policy this week. The Australian dollar rebounded after the biggest decline in a month ahead of a Chinese report today on second-quarter economic growth.
“The U.S. economy looks to be on a recovering trend,” said Mike Jones, a Wellington-based currency strategist at Bank of New Zealand Ltd. “The trend, we think, is for a stronger U.S. dollar given our expectation that tapering will come in this year.”