LONDON (AFX) - The euro retraced yesterday's gains against the dollar in early trade after the overnight recovery on Wall Street, dealers said. "Recovering US stocks and gains in stock futures are providing the dollar with a little bit of support this morning," Halifax chief currency strategist Steven Pearson said. Pearson said the dollar also seemed to be benefiting slightly from the release yesterday of the US Federal Reserve beige book survey showing moderate overall growth and a somewhat uneven picture of sector activity in late April and May. However, WestLB Research analyst Michael Klawitter said the survey was less upbeat than the last report and provided little reason for near-term dollar optimism. "With the risk that today's US retail sales data -- this week's key number -- will show a below consensus outcome, while initial jobless claims may also bound higher, a weaker dollar is on the cards," Klawitter said. Economists expect US retail sales in May to show a decline of 0.2 pct after rising 1.2 pct in April, while initial weekly claims for regular state unemployment benefits are forecast to have risen by 17,000 to a seasonally adjusted 400,000 for the week ended June 8 after falling 32,000 to 383,000 in the previous week. Pearson agreed that weak figures from the US this afternoon could push the euro higher, although perhaps not above yesterday's 17-month high of 0.9500 usd. "It could go up to 0.9490 usd on weak numbers, but that's contingent on US equities," he said. Klawitter said the euro's rally will continue to depend on negative news out of the US, given growing tension over the financing of the EU enlargement and doubts surrounding the strength of the recovery. This morning, the focus will be on a speech by European Central Bank president Wim Duisenberg at 10 am, with investors particularly interested in any comments on the impact of the stronger euro on inflationary pressure, dealers said. In the UK, Bank of England governor Eddie George's appearance before the House of Commons treasury select committee will be closely watched for any signals on the timing of the monetary policy committee's widely-expected interest rate hike.