Dollar gains after upbeat US retail sales data

NEW YORK (Reuters) - The dollar gained on Tuesday after a record increase in US retail sales in May after two straight months of declines, reinforcing a growing belief that the worst may be over for the world’s largest economy. The US currency turned positive against the yen after the data, while the euro hit session lows versus the greenback. Tuesday’s data showed US retail sales jumped 17.7% last month, the biggest rise since the government started tracking the series in 1992. Data for April was revised to show a record 14.7% drop in sales instead of the previously reported 16.2%. Economists polled by Reuters had forecast retail sales would rise 8% in May. The data followed a report early this month showing that the US economy created 2.5 million jobs in May. “There are signs from the data here of better traction for the US economy,” said Shaun Osborne, chief FX strategist at Scotiabank in Toronto. “Perhaps we can move way from the binary risk-off and risk-on move of the market and just focus on fundamentals.” In mid-morning trading, the dollar index was up 0.3% at 96.822 =USD. The euro dropped 0.4% against the dollar to $1.1282. The greenback, meanwhile, rose 0.1% against the yen at 107.385 yen. Fed Chairman Jerome Powell is due to testify before the Senate Banking Committee on Tuesday. He will deliver the same testimony on Wednesday before the House of Representatives Financial Services Committee. His testimony comes a day after the Fed said it would start buying corporate debt on Tuesday as part of an already announced stimulus scheme, and launched its Main Street Lending Program for businesses. Investors will be listening for hints the Fed is willing to do more.