FOREX-Strong data keeps dollar near 2-week highs before Fed meeting

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

(Updates levels, adds analyst comments)
By Shinichi Saoshiro and Stanley White
TOKYO, June 17 (Reuters) - The dollar held near a two-week
high against its major rivals on Monday ahead of a crucial U.S.
Federal Reserve meeting that many expect will lay the groundwork
for an interest rate cut to bolster the world's largest economy.
While strong U.S. retail sales on Friday reduced the
already-low chance of an easing this week and lifted the dollar,
investors are betting Fed Chairman Jerome Powell would leave the
door open to future rate cuts in light of increasing economic
strains.
The dollar index .DXY versus a basket of six major
currencies was little changed at 97.479 after rising to 97.583
on Friday, its highest since June 3.
"As long as Powell does not rule out near term rate cuts,
the dollar will be top heavy after the Fed meeting," said
Masafumi Yamamoto, chief currency strategist at Mizuho
Securities.
Expectations of an interest rate cut at the Fed's June 18-19
meeting fell from 28.3% on Thursday to 21.7% in the wake of the
strong retail data, according to CME Group's FedWatch tool.
However, bets for monetary easing at the July meeting remain
high at 85%.
An escalating trade war between the United States and China
has rippled through global supply chains in a hit to business
investment, factory output and world growth.
Yet, the dollar's Fed-driven downside is being tempered by
policy easings in other countries.
Fears a protracted Sino-U.S. standoff could tip the global
economy into recession have prompted rate cuts in many Asian
countries, including India, Philippines, Malaysia, New Zealand
and Australia.
The European Central Bank also recently raised the prospect
of even more stimulus, while the Bank of Japan is widely
expected to reinforce its commitment to main a massive stimulus
programme for a while yet.
"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 (ECB), and such views put
the dollar at an advantage."
Later on Monday the U.S. Trade Representative's Office will
begin seven days of testimony from U.S. companies about
President Donald Trump's plan to hit another $300 billion worth
of Chinese goods with tariffs. Some traders are watching these hearings, because complaints
from U.S. businesses, which bear the cost of duties on goods
they import, could sway Trump to delay additional tariff hikes.
The euro was little changed on Monday at $1.1214 EUR=
after shedding about 0.6% on Friday, when it fell to an
eight-day trough of $1.1203.
The Australian dollar AUD=D4 edged up 0.2% to $0.6884 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 108.60 yen JPY= after edging up
0.15% on Friday.