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* U.S. retail sales post healthy gains
* Expectations of December Fed hike lift greenback
* China inflation numbers see yen under pressure
By Gertrude Chavez-Dreyfuss
NEW YORK, Oct 14 (Reuters) - The dollar rose on Friday, on track for its largest weekly gain in more than seven months against the euro, after strong U.S. retail sales and producer prices data for September reinforced expectations the Federal Reserve would raise interest rates in December.
The safe-haven yen and Swiss franc fell versus the dollar after risk sentiment got a boost from Chinese data showing producer prices rose for the first time in nearly five years. That boded well for the global economy which has been battling the threat of deflation in recent months.
The dollar index, which tracks the greenback against a basket of six major currencies, added 0.3 percent to 97.788 . It was up 1.2 percent for the week and 2.4 percent for the month so far.
The U.S. retail sales data, which showed a 0.6 percent rise last month after declining 0.2 percent in August, supported the dollar’s gains. Other data on Friday suggested a pickup in inflation, with producer prices rising broadly last month to record their biggest year-on-year increase since December 2014.
“Following a disappointing August, Fed Chair Janet Yellen will be pleased to see retail sales rebound strongly in September,” said Dennis de Jong, managing director at UFX.com in Limassol, Cyprus. “Observers are increasingly confident that December will finally bring the long-awaited interest rate hike.”
The minutes of the latest Fed meeting in September, released on Wednesday, prompted investors to raise their bets of a U.S. rate increase in December. Markets are now pricing in around a 70 percent chance that the Fed will hike then.
Against the yen, the dollar rose 0.5 percent to 104.28 . It was up 1.2 percent for the week.
The dollar did trim gains after a report showed that consumer sentiment, as gauged by the University of Michigan, fell this month to 87.9, the lowest since September 2015.
The euro fell 0.4 percent to $1.1015, heading back toward its Thursday’s low of $1.0982, its weakest level since late July. It was down 1.6 percent for the week, its worst weekly performance since late February.
Later on Friday Yellen will address an economics conference . (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Anirban Nag in London; Editing by W Simon)