By Shinichi Saoshiro and Stanley White

TOKYO (Reuters) - The dollar held near a two-week high against its major rivals on Monday ahead of a crucial U.S. Federal Reserve meeting that many expect will lay the groundwork for an interest rate cut to bolster the world's largest economy.

While strong U.S. retail sales on Friday reduced the already-low chance of an easing this week and lifted the dollar, investors are betting Fed Chairman Jerome Powell would leave the door open to future rate cuts in light of increasing economic strains.

The dollar index versus a basket of six major currencies was little changed at 97.479 after rising to 97.583 on Friday, its highest since June 3.

"As long as Powell does not rule out near term rate cuts, the dollar will be top heavy after the Fed meeting," said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.

Expectations of an interest rate cut at the Fed's June 18-19 meeting fell from 28.3% on Thursday to 21.7% in the wake of the strong retail data, according to CME Group's FedWatch tool. However, bets for monetary easing at the July meeting remain high at 85%.

An escalating trade war between the United States and China has rippled through global supply chains in a hit to business investment, factory output and world growth.

Yet, the dollar's Fed-driven downside is being tempered by policy easings in other countries.

Fears a protracted Sino-U.S. standoff could tip the global economy into recession have prompted rate cuts in many Asian countries, including India, Philippines, Malaysia, New Zealand and Australia.

The European Central Bank also recently raised the prospect of even more stimulus, while the Bank of Japan is widely expected to reinforce its commitment to main a massive stimulus program for a while yet.

"In addition to the upbeat U.S. data, the dollar is supported by weakness in other currencies, notably the euro and antipodeans," said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.

"The Fed might cut rates sooner or later but so might its antipodean counterparts as well as the (ECB), and such views put the dollar at an advantage."

Later on Monday the U.S. Trade Representative's Office will begin seven days of testimony from U.S. companies about President Donald Trump's plan to hit another $300 billion worth of Chinese goods with tariffs.

Some traders are watching these hearings, because complaints from U.S. businesses, which bear the cost of duties on goods they import, could sway Trump to delay additional tariff hikes.

The euro was little changed on Monday at $1.1214 after shedding about 0.6% on Friday, when it fell to an eight-day trough of $1.1203.

The Australian dollar edged up 0.2% to $0.6884 but remained within reach of a five-month low of $0.6862 set on Friday, when the currency retreated nearly 0.7%.

The New Zealand dollar, which slumped more than 1% during the previous session, traded near a three-week low of $0.6488 brushed towards the end of last week.

The dollar was flat at 108.60 yen after edging up 0.15% on Friday.

(Reporting by Shinichi Saoshiro; Editing by Shri Navaratnam)