The dollar rose on Thursday, buoyed by a surge in US retail sales in May that could push Federal Reserve policymakers towards raising US interest rates as early as September. The dollar, which had traded weakly over the previous three days, was up as much as 1.1 percent against the yen after posting on Wednesday its biggest single-day drop in six months versus the Japanese currency.
American consumers last month increased spending by 1.2 percent after an upwardly revised 0.2 percent gain in April, the Commerce Department said. April sales were previously reported unchanged. "The market, which had been expecting something after September, now may be slipping more towards lift-off in September," said Thierry Albert Wizman, global interest rates and currencies strategist at Macquarie Limited in New York.
The dollar lost 1.3 percent against the yen on Wednesday as investors unwound short yen positions following Bank of Japan Haruhiko Kuroda's comment that the yen was already "very weak". The dollar last traded at 123.53 yen, up 0.7 percent on the day, and it was ahead 0.80 percent against the euro. The dollar index was up 0.5 percent. The kiwi was last at $0.6997 in New York trade.
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