[TimoDassss]

The dollar rose against most of its major peers before a report tomorrow forecast to show retail sales in the U.S. increased in February, reducing chances the Federal Reserve will add to monetary stimulus.

The Federal Open Market Committee, which sets interest-rate policy, meets tomorrow. The dollar slid from a near 10-month high versus the yen on speculation traders took advantage of recent gains to sell the greenback. The euro fell before the regional finance ministers meet in Brussels today to review a second aid package for Greece. China’s central bank weakened its daily fixing for the yuan after the nation had its biggest trade deficit in at least 22 years.

“There’s little likelihood that the Fed will take more steps to ease monetary policy, and I suspect the central bank will start acknowledging improvements in the economy,” said Kengo Suzuki, a foreign-exchange strategist in Tokyo at Mizuho Securities Co., a unit of Japan’s third-largest bank by market value. “Strong data in the U.S. is leading to a stronger dollar.”

The greenback rose 0.2 percent to $1.3098 per euro as of 1:21 p.m. in Tokyo from the close in New York on March 9. The currency slid 0.1 percent to 82.36 yen, after touching 82.65 at the end of last week, the highest since April 27. The euro declined 0.3 percent to 107.88 yen.

The Dollar Index, which Intercontinental Exchange Inc. uses to track the greenback against the currencies of six major U.S. trading partners, was at 80.062 after touching 80.104, the highest since Feb. 16.

U.S. Economy
Retail sales in the U.S. probably increased 1.1 percent in February, the most in five months, according to the median estimate of economists in a Bloomberg News survey before Commerce Department figures due tomorrow.

That would follow data on March 9 that showed nonfarm payrolls increased by 227,000 in February after rising by a revised 284,000 the prior month. The unemployment rate held at a three-year low of 8.3 percent.

Fed Chairman Ben S. Bernanke said on Jan. 25, after the FOMC’s last meeting, that policy makers were considering additional asset purchases to boost growth. The central bank also extended a pledge to keep the benchmark interest rate at almost zero through at least late 2014. The Fed bought $2.3 trillion of securities in two rounds of so-called quantitative easing, or QE, from December 2008 to June 2011.

Yen Net-Shorts
Futures traders are betting that the yen will fall against the dollar, figures from the Washington-based Commodity Futures Trading Commission show. The difference in the number of wagers on a decline in the yen compared with those on a gain -- so- called net shorts -- was 19,358 for the week ended March 6. That compared with 1,203 a week earlier, the first time the market was net-short yen since May. A short is a bet that an asset will decline in value.

Hedge funds and other large speculators increased bets that the euro will weaken against the dollar. Net-shorts (.ECLRG) for the shared currency were 116,473.

The U.S. currency fell against the yen as the greenback’s 14-day relative strength index was at 70.9 today, above the 70- level that some traders see as a sign that an asset may change direction.

“It looks that investors are selling the dollar into rallies against the yen to take profit,” said Takuya Kawabata, a researcher at Gaitame.com Research Institute Ltd. in Tokyo, a unit of Japan’s largest currency-margin company. “Should the dollar struggle to go higher from here, it would encourage Japan’s exporters to join in the move too.”

Meeting in Brussels
Ministers from the 17 nations that share the euro will gather in Brussels today to sign off on the 130 billion-euro ($170 billion) second package for Greece after bondholders agreed last week to take a loss on the country’s debt. They’ll also focus on Spain’s budget-cutting efforts and Portugal’s aid program, underscoring their desire to prevent contagion.

Greece’s use of collective action clauses triggered a “restructuring credit event” and will lead to the settlement of about $3 billion in credit-default swap contracts, the New York-based International Swaps & Derivatives Association said last week.

“The markets are worried that other peripheral countries may take the same path as Greece, by forcing bondholders to take losses,” said Gaitame’s Kawabata. “That will weigh on the euro.”

The yuan dropped after China reported on March 10 the February trade shortfall of $31.5 billion, which was four times the size of the previous largest deficit. The People’s Bank of China said in a press statement today that it will use interest rates and exchange rates to manage the economy as Europe’s debt crisis damps global demand.

The reference rate for the yuan was set 0.33 percent lower at 6.3282 per dollar. The currency can move 0.5 percent either side of the fixing. fixing. The yuan declined 0.22 percent to 6.3247 at 11:36 a.m. in Shanghai, the biggest loss since Jan. 20, according to the China Foreign Exchange Trade System.