2010.11.1507:51:00UTC+00Dollar Holds Recent Gains Amid European Debt Problems

The dollar continued to firm up against the euro Monday morning, after reports suggested Ireland may appeal to the European Union for lifeline regarding its lingering debt problems.

Days after Ireland's crisis overshadowed European participation in the G20 meeting in Seoul, the Irish Independent reported that Irish Finance Minister Brian Lenihan may ask for money for the nation's banks, not the government.

"The Irish State doesn't need the funds," Lenihan said. "There are no negotiations. People haven't separated the two issues -- the State and the banks. What is the problem? The problem is about the banks, rather than the sovereign (funds)."

Ireland's issues have once again raised the specter of sovereign debt problems facing some of its European neighbors, namely Greece, Portugal and Spain.

The dollar was steady at $1.3640 versus the euro, having touched a monthly high of $1.3573 last week. With the advance. the dollar has moved away from a 10-month low near $1.4300.

The buck also edged higher against the yen, even after Japan revealed that its economy grew at a stronger than expected pace between July and September, underpinned by a solid increase in domestic demand. As per the report, gross domestic product rose 0.9% compared to the previous quarter.

At last week's G20 meeting the US urged exporters like Japan to focus on improving domestic consumption, warning that the American consumer can no longer be counted on to be the engine of global growth.

The buck was stable near $1.6050 versus the sterling, and just above C$1.01 against its Canadian counterpart.

Looking at the economic calendar in the US, data on retail sales for October will be released at 8:30 a.m ET. Economists project total retail sales increased 0.7%, and sales, excluding autos rose 0.4%, during the month, following increases of 0.6% and 0.7%, respectively in the previous month.

Traders will also focus on the results of the New York Federal Reserve's empire state manufacturing survey, slated for release at 8:30 a.m ET. Economists expect the headline general business conditions index for November to come in at 11.7, lower than the 15.7 reported for the previous month.

At 10.00 a.m. ET, the Commerce Department will release its business inventories report for September. Economists expect that business inventories increased by 0.9% during the month, following a 0.6% month-over-month increase in August.

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