By Deborah Levine & Lisa Twaronite, MarketWatch
NEW YORK (MarketWatch) -- The dollar slipped against major rivals Monday, as U.S. equities advanced and data showed retail sales rose more than economists predicted suggesting improvement in the U.S. economy and emboldening investors to move towards riskier assets and away from the relative safe-haven of the greenback.
The U.S. currency had been under pressure before the data by stepped-up rhetoric from China and better-than-expected Japanese growth data.
The dollar index (DXY 74.94, -0.21, -0.27%) fell to 74.937 from 75.298 in late New York trading on Friday.
The euro bought $1.4975, up from $1.4903 late Friday.
U.S. benchmark stock indexes headed higher on the day, also helped by better data from overseas. The Down Jones Industrial Average (INDU 10,411, +140.04, +1.36%) rose 1.2% in recent trading.
"As long as the Dow can continue to rally, the euro-dollar appears destined to test new highs for the year above $1.5000 later this week," said Michael Woolfolk, senior currency strategist at The Bank of New York Mellon.
U.S. retail sales increased a seasonally adjusted 1.4% in October, led by a rebound in auto sales from a post-clunkers slump, the Commerce Department said. See more on U.S. retail sales.
"The U.S. economy appears to have not only bottomed but also stabilized, with the US consumer spending again -- albeit at a subdued pace," Woolfolk wrote in emailed comments.
A separate report showed manufacturing activity in the New York Federal Reserve's region expanded at a slower pace this month.
Still to come is a speech from Federal Reserve Chairman Ben Bernanke at 12:15 p.m. Eastern time. He follows some policy makers last week who were deemed to sound more dovish and less inclined to step away from the U.S. central banks extremely accommodative monetary policy,
"The only thing that worries the market is the exit strategy," said Andrew Brenner, head of emerging markets at Guggenheim Securities. "He could allude to how the fed will exit some of the stimulus without raising rates."
"If we are wrong and Bernanke says little as to the exit strategy, then the same risk trades we have been seeing in the markets will continue" including higher stocks and commodities and a sell off in the dollar, Brenner said in an email.
Gold futures soared to a fresh high, as further weakness in the U.S. dollar encourages investors to seek the precious metal as an alternative safe-haven. Read more on gold.
Gold is traded in dollars, so a weaker dollar makes it cheaper for investors holding other currencies. Therefore, a move in one often fuels an inverse move in the other.
The dollar was also under pressure a day after China's chief banking regulator criticized loose U.S. monetary policy as leading to increased speculation. Read more on China official's comments.
Also, as President Barack Obama makes his first official visit to China, China seemingly remains content to keep its currency, the yuan, fixed to the greenback.
"The U.S. dollar is lower against all the majors on Obama's failure to wrest any concessions from Chinese regarding their exchange rate," said T.J. Marta, founder and chief strategist at Marta on the Markets.
The yen, meanwhile, got a lift from better-than-forecast Japanese gross domestic product data. See full story on Japan GDP.
The dollar bought 89.37 yen, down from 89.72 yen on Friday.
