* Dollar index firm, dollar/yen holds above recent lows
* Some wariness about tension in Ukraine
* Euro pressured by ECB Draghi's warning
(Adds fresh comments, updates after German ZEW)
By Anirban Nag
LONDON, April 15 The dollar climbed against a
basket of major currencies on Tuesday, helped by firmer U.S.
Treasury yields, after U.S. retail sales data the day before
signalled a brighter outlook for the world's largest economy.
U.S. retail sales recorded their largest gain in 1 1/2 years
in March, the latest data to suggest growth was set to spring
back in the second quarter after a harsh winter.
The dollar index edged up 0.15 percent to 79.848,
holding above Monday's low of 79.562, as a rise in U.S. yields
helped the greenback. The index has a
strong correlation with Treasury yields.
It was also higher against the euro. The common
currency was weighed down by a mixed German ZEW survey for April
and growing rhetoric from European Central Bank officials
warning against a firmer currency.
Some caution over tensions in Ukraine was tempering the
dollar's gains against the safe-haven yen, but overall sentiment
was slowly shifting in favour of the dollar, traders said.
"A lot depends on the data that comes out in the second
quarter," said Jeremy Stretch, the head of currency strategy at
CIBC World Markets. "Good U.S. data would offer yield support to
the dollar and spreads will move in its favour."
U.S. inflation for March is due at 1230 GMT, with core
inflation forecast to edge up 0.1 percent from a month ago. The
New York Fed's "Empire State" general business conditions index,
a gauge of manufacturing in New York, is also due then and is
forecast to show an uptick.
The dollar was flat against the yen at 101.85 yen.
Some bulls were disappointed that Bank of Japan has not
indicated more easing is on the cards.
The yen barely reacted after BoJ Governor Haruhiko Kuroda
said that Prime Minister Shinzo Abe did not bring up additional
monetary easing during one of their regular meetings.
Speaking to reporters after the lunch meeting, Kuroda said
Japan was still in the process of meeting the central bank's 2
percent inflation target, but prices were on track to achieve
the goal. Kuroda also said he told Abe that he would not
hesitate to adjust monetary policy if needed.
EURO GRINDING LOW
The euro remained under pressure after weekend comments from
European Central Bank officials, including President Mario
Draghi, who rekindled speculation about more easing in the euro
It was 0.15 percent lower against the yen at 140.55 yen
. It also shed ground against the dollar to trade at
$1.3800, staying below a three-week high of $1.3906
touched on Friday.
It was held back slightly in European trade by a mixed
German ZEW survey. The monthly poll of investor and analyst
sentiment in Europe's largest economy fell for a fourth
consecutive month in April as the crisis in Ukraine weighed on
the outlook. But the current conditions survey rose to its
highest level since July 2011.
"Investors are cautious about the euro given the ECB
rhetoric," said Manuel Oliveri, an FX strategist at Credit
Agricole. "At the same time, the capital inflow situation is
supporting the euro and unless the ECB takes action, like
cutting the deposit rate to zero, it will be tough for the euro
to drop much."
Euro zone's current account surplus hit a record high in
January, soaring to 25.3 billion euros, indicating more capital
flowed into the region than out. That situation is expected to
continue, with the trade surplus widening in February from a
year earlier as exports rise but imports are unchanged, the
European Union's statistics office Eurostat said on Tuesday.
(Additional reporting by Masayuki Kitano; Editing by Larry