* Dollar index inches up to 7-month high
* US retail sales, producer prices data reinforce rate hike
* China GDP, ECB meeting, US presidential debate awaited
By Shinichi Saoshiro
TOKYO, Oct 17 The dollar inched up to a
seven-month high against a basket of currencies on Monday,
retaining some of the momentum from upbeat U.S. data released
the previous session that reinforced expectations for a December
interest rate hike by the Federal Reserve.
The dollar index was up 0.1 percent at 98.l22 after
touching 98.158, its highest since March 10.
The U.S. currency was steady at 104.110 yen after
gaining 0.4 percent on Friday. The euro hovered close to a near
three-month low of $1.0965 plumbed earlier on Monday.
The greenback garnered support on Friday from strong U.S.
retail sales and producer prices numbers for September - the
latest indication that the U.S. economy regained its momentum in
the third quarter after a lacklustre first half.
A rise in U.S. Treasury yields on Friday following comments
from Fed Chair Yellen gave additional support to the dollar. The
30-year Treasury bond yield reached a four-month
high on Friday after Yellen suggested the Fed may allow
inflation to exceed its 2 percent target.
While the market kept an eye on U.S. yields to see how much
further they could rise and lift the dollar, events that could
impact investor risk appetite were also awaited to see if the
greenback could retain its upward momentum.
"The schedule this week isn't packed with strong U.S. data
releases, and market focus is likely to centre around three
events," said Shin Kadota, chief Japan FX strategist at Barclays
"These would be Wednesday's China GDP data, the ECB policy
meeting after recent talk of tapering and the last U.S.
presidential debate, which would give the market a chance to
confirm if Clinton has the lead over Trump."
The third and final U.S. presidential debate takes place on
late on Wednesday (U.S. time) and the ECB holds its policy
meeting on Thursday.
Elsewhere, the pound slipped 0.2 percent to $1.2169
. Sterling, dogged by prospects of a complex and
potentially chaotic exit by Britain from the European Union, had
lost nearly 2 percent last week.
The Australian dollar was down 0.3 percent at $0.7596
, trimming some of its gains made on Friday on the back
of a bounce in commodity prices.
(Reporting by Shinich Saoshiro; Editing by Eric Meijer)