The dollar rose toward a nine-month high against the euro as signs the U.S. economy is gaining momentum added to speculation the Federal Reserve will be one of the first major central banks to remove stimulus measures.

The greenback advanced versus 12 of 16 major currencies, helped as gold prices fell after the International Monetary Fund said it would begin selling bullion. U.S. reports today may show the Conference Board’s index of leading economic indicators rose for a 10th month and growth in Philadelphia-area manufacturing. The yen rose for the first time in five days against the dollar as the Bank of Japan refrained from expanding bond buybacks.

“The U.S. is in a comfortable and leading position when it comes to growth and interest-rate differentials, and that’s supportive for the dollar,” said Audrey Childe-Freeman, a senior currency strategist at Brown Brothers Harriman Ltd. in London. “It’s likely that an exit strategy will be contemplated in the U.S. well before the euro zone.”

The dollar strengthened to $1.3574 per euro as of 6:15 a.m. in New York from $1.3607 yesterday. It reached $1.3532 on Feb. 12, the strongest since May 19. The yen rose to 123.39 per euro from 124.17, and to 90.89 versus the dollar from 91.25.

The New York-based Conference Board’s gauge of the outlook for the next three to six months climbed 0.5 percent in January, according to a Bloomberg survey of economists. The Fed Bank of Philadelphia’s general economic index advanced to 17 this month from 15.2 in January, a separate Bloomberg survey showed.

Gold, which is priced in dollars, declined after the IMF said yesterday it will “shortly” expand sales of the metal to the open market. Bullion surged 24 percent in 2009 and trades at about $1,100, near last year’s record of $1,227.50 an ounce.

European Banks

The dollar extended gains against the euro amid speculation European lenders may need more short-term funding from central banks amid Greece’s fiscal crisis.

The euro has slumped 5.2 percent against the dollar this year and 7.3 percent against the yen amid concern sovereign debt problems will hamper the 16-nation currency area’s recovery.

The European Central Bank’s marginal lending facility extended more than 15 billion euros ($20.4 billion) over Feb. 11, 12, 15 and 16, according to central bank data. European Union regulators this week ordered Greece to disclose details of currency swaps after an inquiry uncovered a series of agreements with banks that it may have used to conceal its debts.

“One factor weighing on the euro and suggesting stresses related to Greece remain elevated is higher-than-normal use of the ECB’s marginal lending facility over the last four days,” said Greg Gibbs, a currency strategist at Royal Bank of Scotland Group Plc in Sydney. “This may reflect troubles some banks are experiencing funding themselves in the interbank market.”

Elsewhere in Europe, the pound fell to $1.5594 from $1.5672 on speculation the U.K’s recovery from last year’s recession will trail the U.S. as a report today showed Britain had its first budget deficit for January since records began in 1993.

Fed Minutes

The dollar was also pushed higher after minutes of the Fed’s Jan. 26-27 meeting released yesterday showed some officials wanted to start selling assets in the “near future” as a way to shrink the bank’s balance sheet. They unanimously agreed that Fed assets and banks’ excess cash will need to shrink “substantially over time” and the central bank will need to return to holding just Treasuries.

Futures on the CME Group exchange yesterday showed a 47 percent chance the Fed will raise its target rate for overnight bank lending by at least a quarter-percentage point by its September meeting, up from 46 percent odds the day before.

Yen ‘Attractive’

The Bank of Japan kept its benchmark interest rate close to zero and maintained its monthly debt repurchase level today, resisting government pressure to take further action to counter deflation. The yen had dropped yesterday on concern the BOJ may add more cash to the system after Finance Minister Naoto Kan said the government wants to cooperate with the central bank to curb falling prices in the economy.

“The lack of action at the BOJ helped the yen trim its losses, driven yesterday by speculation about additional measures,” said Shinichi Hayashi, a dealer in Tokyo at Shinkin Central Bank, the central institution for Japan’s financial cooperatives.

The yen was also helped by speculation that local exporters bought the currency after it fell to a four-week low of 91.38 yesterday. Large manufacturers expect the yen to average 91.16 per dollar in the six months to March 2010, according to the Bank of Japan’s quarterly Tankan survey.

“Levels of around 91 would likely be attractive for exporters,” said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd., Japan’s largest currency broker.

BlueGold’s Yuan View

China may let its currency appreciate by 5 percent as early as next month to prevent economic growth from stoking inflation, according to Stephen Jen of BlueGold Capital Management LLP.

Policy makers may also raise interest rates this year to cool an economy that expanded by 10.7 percent in the fourth quarter, the fastest increase in two years, Jen said in an interview this week. The central bank last week ordered lenders to boost the amount of cash they must put aside as reserves for the second time this year in an attempt to curb growth in loans.

“China is taking steps in the right direction, but the policies so far aren’t adequate,” said Jen, who helps oversee about $1.5 billion as a managing director at BlueGold in London. “It will require a multi-faceted policy approach to deal with such a big, and sometimes volatile, economy. We expect rate hikes, and we expect a policy change” on the yuan, he said.

Twelve-month non-deliverable yuan forwards traded at 6.6522 per dollar at 5 p.m. in Hong Kong, from 6.6575 at the start of the week, reflecting traders’ bets the currency will advance 3 percent from its current “spot” rate of 6.8333. Forwards are agreements in which assets are bought and sold at current prices for delivery at a future specified time and date. Non- deliverable contracts are settled in dollars rather than the local currency.