* Dollar strengthens as equities rise on risk appetite
* View that U.S. rate cuts to end soon benefits greenback
* U.S. data, including Tuesday's retail sales, awaited
(Recasts, updates prices, changes byline, dateline, previous
LONDON)
By Lucia Mutikani
NEW YORK, May 12 (Reuters) - The dollar rose broadly on
Monday, boosted by a slight rise in investors' appetite for
risk and growing speculation that the current cycle of U.S.
interest rate cuts may be ending.
The dollar chalked up its biggest gains against the yen and
the Swiss franc. In other market news, European banking
heavyweight HSBC <HSBA.L> posted unexpectedly strong
first-quarter earnings and oil prices <CLc1> retreated, helping
push global equities higher. Wall Street stocks opened higher.
"The dollar is benefiting from generally improved risk
appetite overnight. We are seeing more of a consolidation here
ahead of a busy economic week and a Fed calendar as well," said
Omer Esiner, a currency analyst at Ruesch International in
Washington.
The New York Board of Trade's dollar index, which tracks
the dollar's performance against a basket of six currencies,
was up 0.1 percent at 73.245 <.DXY>, pushing towards the 73.895
level reached last week for the first time since early March.
The index briefly touched a session high of 73.522. The
dollar surged to an intraday high of 104.04 yen <JPY=> and was
last trading at 103.76 yen, up 0.9 percent on the day. Against
the Swiss franc <CHF=> it was up 0.8 percent at 1.0496 francs.
Views that the Federal Reserve was near the end of its
cycle of easing monetary policy after lowering its overnight
lending rate by 3.25 percentage points to 2 percent since
mid-September also lent support to the dollar versus the euro.
The euro was down 0.2 percent on the day at $1.5449 <EUR=>
having dipped below $1.54 to hover within range of a two-month
low of $1.5284 hit last week.
"The dollar continues to benefit from this view that the
U.S. economy has come to a point where the Fed is likely near
or at the end of its policy easing cycle," said Esiner.
A big slate of economic data, especially April U.S. retail
sales on Tuesday, as well as speeches by several Fed officials
will be closely watched for clues on whether the U.S. central
bank will cut rates again next month.
At the same time, mounting signs that European economic
growth is stumbling has stirred speculation the European
Central Bank could edge towards trimming rates.
Weak economic data suggesting Australia and New Zealand may
be heading for rate cuts initially pushed down the countries'
high-yielding currencies as lower borrowing costs would trim
their interest rate advantage against other currencies.
Sterling <GBP=> bucked the trend to rise 0.2 percent on the
day to $1.9582 after robust UK wholesale data damped
expectations of aggressive easing by the Bank of England.
Analysts said that while risk appetite had picked up, many
investors stayed cautious about the health of the global
economy and financial systems.
"Maybe some participants are thinking that they have priced
in a bit too much weakness in the U.S.," said Citigroup
currency strategist David Pais in London, adding:
"Our own sense is that the slowdown in the U.S. is going to
be a lot worse because it's very much the epicenter of the
financial market problems and the housing market problems."
News that a major earthquake had shaken parts of China had
limited initial impact on the currency market as investors
awaited more news of damage. For more click on [].
A survey showed business confidence in Australia hit the
lowest since September 2001 and housing finance sharply lower,
while a report in New Zealand showed housing price gains
slowing for an eighth straight month and projected to fall.
(Additional reporting by Veronica Brown in London; Editing by
James Dalgleish)
