* Yen hits fresh lows versus dollar, euro after G7 meeting
* U.S. April retail sales edge up unexpectedly in April
* More dollar gains depend on continued improvement in US
* Euro dips on ECB's Visco comments, Aussie at 11-month low
By Julie Haviv
NEW YORK, May 13 The dollar gained for a third
straight session against the yen and euro on Monday as data
showing an unexpected rise in U.S. retail sales assuaged fears
of an economic slowdown in the world's largest economy.
The dollar, which pierced the 100 yen mark last week,
continued to add to gains, hitting its highest level against the
yen since October 2008 after Group of Seven finance officials
over the weekend held back from directly criticizing Japan's
The dollar's outperformance can largely be attributed to
central bank policy, with aggressive monetary easing in Japan
and concerns about the risk of negative deposit rates in the
euro zone contrasting with expectations the U.S. Federal Reserve
will scale back its asset-buying program later this year.
The dollar gained after U.S. retail sales unexpectedly rose
in April as households bought automobiles, building materials
and a range of other goods, pointing to underlying strength in
U.S. Treasury bond yields, which move inversely to price,
rose after the data, further fueled broad dollar strength.
"We will not say that the consumer is back, but we will say
the impact of payrolls taxes and other fiscal follies created by
Washington politicians is hurting the economy less than analysts
had cared to previously factor in," said Andrew Wilkinson, chief
economic strategist at Miller Tabak & Co. In New York.
The greenback's trajectory this week could be influenced by
a bevy of Federal Reserve speakers, who will provide
opportunities for updates on the Fed's exit and the paring back
of its asset purchase plan.
An article in the Wall Street Journal over the weekend
suggested the Fed was working on a plan to taper its bond
buying, currently at $85 billion a month, but gave no indication
on the timing.
The dollar last traded at 101.64 yen, up 0.1 percent
on the day, having earlier reached a peak of 102.14 on Reuters
trading platform, its highest since October 2008, as investors
saw the outcome of the G7 meeting as a signal to sell the
"Whether the dollar rises quickly to 104 or 105 yen will
depend on U.S. data," said Jane Foley, senior currency
strategist at Rabobank.
"We know there is fiscal consolidation in the U.S. and the
possibility we will get some disappointing data. This could act
as a restraint on dollar/yen."
Traders said investors took profit on dollar gains above 102
yen, and it may struggle in the short term before a reported
options barrier at 102.50 yen. But most expect more yen falls,
with many seeing a drop towards 105.
"It is a one-way bet and every pullback (in dollar/yen) will
be met by buying interest," said Niels Christensen, currency
strategist at Nordea in Copenhagen, adding the yen could fall to
105-110 per dollar in the next six months.
EURO, AUSSIE FALL
The euro was last down 0.1 percent at $1.2982,
pressured after European Central Bank policymaker Ignazio Visco
said the central bank may opt for negative deposit rates.
In a Reuters poll conducted after Visco's comments, 22 of 25
euro money market traders said they did not expect the ECB to
cut the rate below zero - in line with findings of a wider poll
of economists taken last week.
Against the yen, the euro was up 0.1 percent at
132.12 yen, off an earlier three-year high of 132.39.
Broad dollar gains, coupled with expectations of more
interest rate cuts in Australia and concerns about slowing
growth in China, pushed the Australian dollar to an