European shares gained on Tuesday on hopes German and U.S. data will support rising hopes of an economic recovery ahead of a monetary policy statement by the Federal Reserve.

Germany's ZEW economic sentiment index, due at 1000 GMT, should show Europe's biggest economy steadily recovering from last year's dip, while U.S. February retail sales, due at 1230 GMT, are expected to reveal a second straight month of gains.

Strong data from the two economic powerhouses should combine to support stocks and growth-linked currencies like the Australian and New Zealand dollars, said Steve Barrow, head of G10 currency research at Standard Bank.

There is an upside risk to U.S. retail sales data, given the underperformance last month.

The hopes sent Asian shares equities to one week highs <.MIAPJ0000PUS> earlier and in the day and saw the FTSE Eurofirst <.FTEU3> index of top European shares open up 0.5 percent.

With expectations of further U.S. monetary having eased after recent strong economic data, the dollar <.DXY> held close to 7-week high against basket of currencies. The yen bounced back from a 11-month low against the U.S. currency after the Bank of Japan stopped short of taking aggressive easing steps.

The euro little changed at $1.3145 but above one-month low of $1.3079 hit on Monday as worries over Portuguese and Spanish sovereign debt keep investors on edge.

German government bond futures were 24 ticks lower at 138.63, after hitting a contract high of 139.06 the previous session ahead of the ZEW.

(Additional reporting by Anirban Nag; Editing by John Stonestreet)