• Euro gains as ECB officials question extent of stimulus needed
  • Futures show odds of Fed rate increase at almost 80%

The dollar rose for a second day against the yen before a U.S. retail-sales report which, according to economists, will reinforce bets the Federal Reserve is on course to raise interest rates for the first time in almost a decade.

The Bloomberg Dollar Spot Index headed for a 0.4 percent weekly gain that’s taking it close to its highest level since the gauge started in 2004. The prospect of a rate increase at the Fed’s Dec. 15-16 meeting is heightening the allure of assets denominated in the greenback.

The euro climbed against all but three of its 16 major peers on Friday after a week in which officials fueled skepticism about the extent of stimulus still to be delivered by the European Central Bank. The shared currency has gained about 3 percent versus the dollar since ECB President Mario Draghi unveiled a rebooted monetary stimulus package on Dec. 3 that fell short of what most investors anticipated.

“A U.S. rate hike is mostly a done deal and there’s potential for some dollar buying,” said Masakazu Satou, a currency adviser at Gaitame Online Co., a retail foreign-exchange brokerage in Tokyo.

The dollar climbed 0.3 percent to 121.94 yen as of 10 a.m. London time, the biggest gain this week. It was little changed at $1.0945 per euro, after a 0.8 percent advance on Thursday, while the European currency jumped 0.3 percent to 133.44 yen.

U.S. sales increased 0.3 percent in November after rising 0.1 percent the month before, Commerce Department figures will show Friday, according to economists surveyed by Bloomberg.

The odds of the Fed raising its main rate from near zero at next week’s gathering were at 78 percent, futures data compiled by Bloomberg show.

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