The dollar rose more than 1.4 cents against the world's other, major currencies Thursday -- its third large gain in four days -- after traders calculated that better-than-expected May retail sales will prompt the U.S. Federal Reserve to increase interest rates soon, possibly by late summer.

The dollar strengthened 1.4 cents to $1.5400 versus the euro, 1.7 cents to $1.9444 versus the British pound and about 1 yen to 107.92 versus Japan's yen on Thursday at mid-day.

Dollar bulls, subject to numerous false-breakouts during 2008, were encouraged by the most recent U.S. retail sales data. The U.S. Commerce Department Thursday announced that May retail sales rose 1%, double the consensus estimate of economists surveyed by Bloomberg News.

May retail sales surprises traders

Currency trader Andrew Resnick told BloggingStocks Thursday the surprisingly upbeat May retail sales report has not made him a dollar bull, but he's inching closer to it. "It's tough to form a meaningful conclusion with just one data point, but retail sales did take the dollar bears by surprise," Resnick said. "Most were expecting a sort of neutral number, but the May number was not neutral. If anything, it suggests the consumer, while cutting back, has not disappeared from the stage completely."

Still, the favorable May retail sales report was not enough to push Resnick decisively into the dollar bull camp, Fed rate increase this summer or not, and he remains flat, with no open currency positions presently. "We've been led down this dollar recovery road too many times, so for the sake of avoiding a red screen [trading losses], I'm flat," Resnick said. "What's that old saying? 'fool me once, shame on you, fool me twice, shame on me.' "
Further, Resnick does not believe the $50 billion in tax rebate checks stemming from the Economic Stimulus Act of 2008, passed in February, in and of themselves, will be enough to create a trend reversal, a long-term rise in the dollar.

"The rebate checks probably won't be enough to get the economy growing again and we need to see a healthy U.S. economy before one can say there's some substance behind the dollar bulls' position. I'll be a dedicated dollar bull when the economy is growing and U.S stock investments are attractive again. That will really get the fundamentals moving in the dollar's favor again," Resnick said.