* Dollar index inches up to 7-month high
* Dollar/yen loses bit of steam, euro/dollar dips to 3-month
* US retail sales, producer prices data reinforce rate hike
* China GDP, ECB meeting, US presidential debate awaited
(Adds details and quotes)
By Shinichi Saoshiro
TOKYO, Oct 17 The dollar inched up to a
seven-month high against a basket of currencies on Monday,
retaining momentum from upbeat U.S. data last week that
reinforced expectations of a December interest rate hike by the
A rise by U.S. yields to four-month highs also buoyed the
The dollar index was up 0.1 percent at 98.095 after
touching 98.158, its highest since March 10.
The U.S. currency lost a bit of steam against its Japanese
peer, dipping 0.1 percent to 104.110 yen after rising to
as high as 104.480 on Friday.
The euro was flat at $1.0970, hovering close to a near
three-month low of $1.0964 plumbed earlier on Monday.
The dollar garnered support on Friday from strong U.S.
retail sales and producer price numbers for September - the
latest indication that the U.S. economy regained its momentum in
the third quarter after a lacklustre first half.
Speculators lifted favourable bets on the dollar for a third
straight week, with net longs hitting their highest in more than
eight months, according to Reuters calculations and data from
the Commodity Futures Trading Commission (CFTC) released on
The CFTC data showed speculators cut yen net longs to 45,000
contracts from roughly 70,000 the prior week.
"For now, support for dollar/yen is likely to come from
passive selling of the yen involving winding down of positions,
rather than active, speculative selling," said Koji Fukaya,
president of FPG Securities in Tokyo.
"A December Fed rate hike is mostly priced in by the market.
The key to further dollar strength is how far U.S. long-term
rates can climb."
Also lifting the dollar on Friday, the 10-year
and 30-year Treasury yields reached four-month highs
after Federal Reserve Chair Janet Yellen suggested the Fed may
allow inflation to exceed its 2 percent target.
"The schedule this week isn't packed with strong U.S. data
releases, and the 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 between
Democrat Hillary Clinton and Republican Donald Trump takes place
late on Wednesday (U.S. time) and the ECB holds its policy
meeting on Thursday.
Clinton maintained a substantial projected advantage in the
race to win the Electoral College and claim the U.S. presidency,
according to the latest results from the Reuters/Ipsos States of
the Nation project released on Saturday.
Elsewhere, the pound slipped 0.3 percent to $1.2156
. 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 0.4 percent at $0.7586
, 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 and Kim