Growing evidence that the U.S. economy is thriving in what was expected to be a soft patch drove the dollar to seven-month highs against the euro on Monday as investors focused on key inflation data later in the week. With many continental market players staying away for a holiday, European stocks and bond prices both slipped. Japanese shares earlier fell nearly 1 percent. The foreign exchange market was the day's main mover, with investors siding for now with the idea that strong U.S. economic growth will overcome the drag of a large current account deficit to boost the dollar. "The U.S. is leaving its 'soft patch' behind," American Express Bank said in its weekly report. The dollar was trading around $1.260 to the euro after hitting a seven month high of $1.2582. By comparison, it was at $1.358 in early January. The dollar also hit a one month high of 107.78 Japanese yen . A raft of relatively strong U.S. economic reports have built the case for dollar bulls in recent days. These include solid April retail sales and narrower-than-expected external deficit data. Investors were now awaiting producer prices on Tuesday and consumer prices on Wednesday for a guide to inflation -- and with it expectations for U.S. interest rates. American Express said that despite the bullish signs, the recent U.S. reports may be a bit misleading.