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FOREX-Dollar bounces on solid U.S. data, higher yields
Published at 14/09/2018 at 16:10

* U.S. retail, industrial data offset weak inflation readings

* Euro retreats after touching two-week high vs dollar

* Chinese yuan slips after mixed domestic data

* Graphic: World FX rates in 2018

(Updates market action, changes dateline, previous LONDON)

By Richard Leong

NEW YORK, Sept 14 (Reuters) - The dollar rose against a basket of currencies on Friday, rebounding from a near 1-1/2-month low, as upbeat U.S. economic data and higher Treasury yields rekindled some investor appetite for the greenback.

The world's top reserve currency was still on track for a weekly loss as reduced trade tensions between China and the United States, together with encouraging developments between Britain and the European Union on terms for Britain's exit from the economic bloc, pared safe-haven demand for the dollar.

"Generally today's data showed strong results, which are supporting the dollar. Higher yields are also giving it a boost," said Brian Daingerfield, macro strategist at NatWest Securities in Stamford, Connecticut.

The U.S. Commerce Department said domestic retail sales rose 0.1 percent in August, the smallest gain in six months, but July figures were revised higher, supporting the view of solid consumer spending in the third quarter.

Consumer spending, which accounts for two-third of the U.S. economy, will likely hold firm as consumer optimism improved to its strongest since March, according to the University of Michigan.

Another bright spot was a 0.4 percent increase in industrial output last month.

Friday's data offset inflation data this week which fell of expectations, causing traders to dial back their bets that inflation is accelerating, analysts said.

The data also lifted Treasury yields, with the 10-year yield

touching 3 percent for the first time in six weeks.

At 10:58 a.m. (1458 GMT), an index that tracks the dollar against six major currencies was up 0.25 percent at 94.753, trimming its weekly decline to 0.6 percent.

The euro climbed to a two-week high earlier on Friday following the disappointing U.S. inflation data before retreating against the greenback. The common currency was down 0.2 percent at $1.16665, EBS data showed.

Sterling was 0.25 percent lower at $1.3073 after hitting $1.3145 earlier on Friday, its highest level since July 31, according to Reuters data.

Brexit talks are set to intensify over the coming week, with the first of three summits that EU leaders hope will settle an agreement for departing Britain within the next two months.

China's offshore yuan slipped 0.27 percent to 6.8641 per U.S. dollar .

Data on Friday showed China's investment growth for August fell to a new record low, while industrial output and retail sales for the month rose more than expected.

Chinese officials welcomed an invitation from Treasury Secretary Steven Mnuchin for new talks to resolve the Sino-U.S. trade conflict, although comments from U.S. President Donald Trump tempered market expectations. ========================================================

Currency bid prices at 10:59AM (1459 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Euro/Dollar EUR= $1.1667 $1.1688 -0.18% -2.74% +1.1721 +1.1655

Dollar/Yen JPY= 112.0700 111.9200 +0.13% -0.53% +112.0900 +111.7600

Euro/Yen EURJPY= 130.77 130.83 -0.05% -3.26% +131.1100 +130.5700

Dollar/Swiss CHF= 0.9658 0.9653 +0.05% -0.87% +0.9670 +0.9635

Sterling/Dollar GBP= 1.3073 1.3105 -0.24% -3.25% +1.3142 +1.3074

Dollar/Canadian CAD= 1.3036 1.2996 +0.31% +3.65% +1.3047 +1.2983

Australian/Doll AUD= 0.7178 0.7192 -0.19% -7.99% +0.7216 +0.7170

ar

Euro/Swiss EURCHF= 1.1270 1.1285 -0.13% -3.58% +1.1304 +1.1262

Euro/Sterling EURGBP= 0.8924 0.8920 +0.04% +0.46% +0.8932 +0.8898

NZ Dollar/Dolar NZD= 0.6560 0.6566 -0.09% -7.42% +0.6595 +0.6559

Dollar/Norway NOK= 8.2414 8.2156 +0.31% +0.42% +8.2687 +8.2112

Euro/Norway EURNOK= 9.6165 9.6082 +0.09% -2.36% +9.6415 +9.6038

Dollar/Sweden SEK= 9.0220 8.9515 +0.57% +10.00% +9.0563 +8.9474

Euro/Sweden EURSEK= 10.5281 10.4680 +0.57% +7.00% +10.5658 +10.4640

(Additional reporting by Tommy Wilkes in LONDON Editing by Toby Chopra and Meredith Mazzilli)

((richard.leong@thomsonreuters.com; +1 646 223 6313; Reuters Messaging: richard.leong.thomsonreuters.com@thomsonreuters.net; Twitter @RichardLeong2))