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TOKYO, Mar 14 (Reuters) The dollar slipped for a second straight session on Tuesday as some traders locked in profits ahead of a barrage of U.S. economic data that may shed light on how much further the Federal Reserve will raise interest rates.

A retail sales report on Tuesday and consumer price data later in the week will be the main focus for investors.

Buoyant readings would likely strengthen expectations that the Fed will extend its streak of 14 straight rate rises and boost its funds rate to 5 percent or higher in coming months to stamp out the threat of inflation, analysts say.

''We're seeing a little profit taking ahead of all the data,'' said Nobuaki Kubo, forex planning manager at Resona Bank in Tokyo. ''But as long as it comes in reasonably strong I'd say people will be looking for the Fed to keep raising rates in May and even beyond, and the dollar to start rising again.'' Most analysts say a rate rise at the Fed's next policy meeting later this month -- the first under Fed chief Ben Bernanke -- is a sure bet, but some are less confident that would be followed by another hike at the meeting in May.

Any signs that the Fed's tightening cycle is near an end would likely hurt the dollar, especially with the European Central Bank set to raise interest rates again, and even the Bank of Japan seen nudging up rates by late in the year.

San Francisco Fed President Janet Yellen said on Monday that policy-makers needed to weigh the risk of raising rates too far, and suggested she was comfortable with the outlook for inflation, although it was running near the top of the Fed's comfort zone.

The Fed's campaign of rate rises has helped the United States attract more than enough capital to finance its gaping current account deficit, the key driver of the dollar's three-year decline to the end of 2004.

Current account figures for the final quarter of 2005 are due at 1330 GMT.

At 0310 GMT, the dollar was buying 118.55 yen, down from around 118.75 yen marked in late U.S. trade and off a one-month high of 119.20 yen hit on electronic trading platform EBS on Monday.

The euro was slightly higher at $1.1970.

EURO BOOSTED The euro gained across the board on Monday, with some analysts citing a report on Sunday that the United Arab Emirates' central bank was considering putting more of its reserves -- estimated at around $23 billion in December -- into euros.

Some traders, however, said the move was largely technical, and had more to do with a covering of short positions after the euro finished above $1.1900 on Friday, clawing back early losses even after a solid U.S. jobs report.

Currency traders were also looking ahead to the ZEW survey of German investor sentiment due at 1000 GMT.

The headline index is expected to come in near a two-year high, which could add to expectations that the ECB will keep raising interest rates after two quarter point rises since December.

In contrast the Bank of Japan is widely expected to keep short-term rates pinned near zero until late in the year, even after the central bank abandoned its five-year-old ultra-easy monetary policy on Thursday.

The maintenance of a zero-rate policy will likely keep the yen locked firmly in a range of 115-123 per dollar for the first half of this year, BNP Paribas strategists said in a note to clients.

The Japanese bond market is factoring in the inevitability of higher rates in Japan.

Short-term government bond yields have shot to fresh 5-year highs this week, and rate futures are now pricing in two quarter point rate rises by the BOJ by year-end.

The New Zealand dollar was the biggest mover on Tuesday, sliding as much as 1 percent against the U.S. dollar after a surprisingly weak retail sales report added to worries that the kiwi's rate premium was set to erode.

The kiwi was trading at 63.55 U.S. cents after plummeting to a 20-month low of 63.44 cents and bringing its losses this year to more than 5 percent.

REUTERS CS KP1024