American focus: speculations on further Fed rates hike supported USD on Monday. [E]

The dollar gained the most in two weeks versus the euro on speculation the Federal Reserve will continue to raise interest rates even after weak June Payrolls last Friday. 

The dollar advanced as interest-rate futures showed an increased 

probability of another rate lift next month. This time futures signal 65% odds Fed will go further and boost it's key rate to 5.5% at the August meeting. Payrolls output led to bets drop to 60% from high 85%. 

USD pared its decline versus the yen after Prime Minister Junichiro Koizumi said Japan is studying the legitimacy of striking bases in North Korea.

The U.S. currency headed for its first advance since North Korea fired seven missiles in Japan Sea on July 5. Koizumi stressed that Japan needs to make better its safety level after the tests. Besides USD gains can be limited by speculations BOJ rates hike this week. Thus analysts increase bets ECB will lift it's landing rate after ECB President Jean-Claude Trichet optimistic speech. 

Wall Street continue to set gains ahead strong Quarter Earnings report season. The first reporter is Alcoa which will present its report today after the close. One more Dow component General Electronics will 

present its report on Thursday before the bell.

In general analytics forecast corporate income in Q2 will make +12.3% y/y. Walt Disney made record $132 mln. from "Pirates of the Caribbean: Dead Men’s chest". The retail drug store chain CVS added 3% after sales rose 8.4% in June. Kraft Foods agreed on United Biscuits purchase.