FOREX-Dollar holds near 2-week high after strong U.S. retail data

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* US retail sales data temper views of Fed cutting rates
this week
* Weakness in euro, antipodean currencies also seen buoying
dollar

By Shinichi Saoshiro
TOKYO, June 17 (Reuters) - The dollar hovered near a
two-week high early on Monday, as strong U.S. retail sales data
tempered some of the fears about a sharp downturn in the world's
largest economy.
That provided some relief to the dollar ahead of the
Federal Reserve's policy meeting this week. While few expect the
Fed to cut rates at Wednesday's policy review, traders are
wagering that policy makers will do just that in coming months.
The dollar index .DXY versus a basket of six major
currencies was little changed at 97.509 after rising to 97.583
on Friday, its highest since June 3.
The index had declined to a 2-1/2-month low of 96.459 a
little more than a week ago after a weak U.S. jobs report
heightened Fed rate cut prospects.
Expectations of an interest rate cut at the Fed's June 18-19
meeting fell from 28.3% on Thursday to 21.7% according to CME
Group's FedWatch tool. But bets of an easing at the July meeting
remain high at 85%.
"In addition to the upbeat U.S. data, the dollar is
supported by weakness in other currencies, notably the euro and
antipodeans," said Junichi Ishikawa, senior FX strategist at IG
Securities in Tokyo.
"The Fed might cut rates sooner or later but so might its
antipodean counterparts as well as the European Central Bank,
and such views put the dollar at an advantage."
With growth slowing and inflation staying well below the its
target, the ECB recently raised the prospect of even more
stimulus, arguing that a rate cut or even more asset purchases
may become necessary.
The central banks of Australia and New Zealand face a
similar predicament as the global economy braces for fallout
from the U.S.-China trade conflict.
Australian bond yields slipped to a record low last week as
investors priced in further easing by the Reserve Bank of
Australia, which already cut rates to a record low 1.25% earlier
this month.
The euro was little changed at $1.1216 EUR= after shedding
about 0.6% on Friday, when it fell to an eight-day trough of
$1.1203.
The Australian dollar AUD=D4 crawled up 0.1% to $0.6878
but remained within reach of a five-month low of $0.6862 set on
Friday, when the currency retreated nearly 0.7%.
The New Zealand dollar NZD=D4 , which slumped more than 1%
during the previous session, traded near a three-week low of
$0.6488 brushed towards the end of last week.
The dollar was flat at 108.570 yen JPY= after edging up
0.15% on Friday.