* Dollar, yen advance on safe-haven bid
* Investors wary ahead of more U.S. corporate earnings
* U.S. retail sales unexpectedly fell in March
(Updates prices, adds quotes)
By Wanfeng Zhou
NEW YORK, April 14 (Reuters) - The dollar and yen rose on
Tuesday after disappointing U.S. retail sales data and investor
caution about corporate earnings boosted safe-haven flows into
the two currencies.
The wariness pressured the euro and currencies that carry
higher interest rates such as the Australian and New Zealand
dollars, which tend to benefit when there is risk appetite in
the market.
The dollar dropped below 99 yen to its lowest since the
beginning of April as U.S. stocks fell after news of an
unexpected decline in sales at U.S. retailers in March dampened
recent optimism over the state of the economy.
The retail sales data "was a big disappointment and
(market) sentiment turned on the back of that and has never
really recovered," said Matthew Strauss, senior currency
strategist at RBC Capital Markets in Toronto, adding:
"The currency that most benefited from this return of risk
aversion was the yen."
Despite much-higher-than-expected profits from Goldman
Sachs <GS.N>, analysts said investors also remained cautious
ahead of earnings results this week from Citigroup <C.N>, JP
Morgan Chase <JPM.N> and General Electric <GE.N>.
Strauss said given the expectations that have been built
into the markets, "the risk is now more skewed to a sharp
market reaction if those results disappoint."
"Disappointing economic data and earnings results would see
risk aversion returning, which would provide further support
for first the yen and second the U.S. dollar," he added.
In midday New York trade, the euro fell 0.6 percent to
$1.3288 <EUR=> and 1.6 percent to 131.56 yen <EURJPY=>.
Traders said the euro also fell on technical factors after
failing to extend gains on Monday that took it close to $1.34
against the dollar, its highest in nearly a week.
The dollar fell as low as 98.88 yen, according to Reuters
data, and last traded down 1 percent at 99.01 yen <JPY=>.
The Australian dollar fell 0.3 percent to $0.7286 <AUD=>
and the New Zealand dollar lost 0.8 percent to $0.5866 <NZD=>.
RETAIL SALES
Earlier, a government report showed sales at U.S. retailers
unexpectedly fell 1.1 percent in March, snapping two months of
increases. Analysts polled by Reuters had forecast retail sales
rising 0.3 percent.
The dismal number further fueled worries about a shaky
global economy and helped reverse some of the recent positive
sentiment in markets. For more see [].
"U.S. data came well below expectations and doused the
positive sentiment in the markets in the past couple of weeks,"
said Omer Esiner, forex market analyst at Ruesch International
in Washington.
"The data shows that expectations that the U.S. economy has
bottomed were overdone," he added. It "reintroduced some
risk."
Risk sentiment had improved remarkably in recent sessions,
buoyed by a five-week rally in U.S. stocks and growing hopes
that the global economy may be past the worst.
But analysts said while the Goldman earnings report
encouraged sentiment towards the financial sector, the market
will need more positive news to continue its rebound.
"The follow through after the Goldman announcement has been
on the disappointing side, providing one hint that the risk
revival is in need of some fresh oxygen, something the latest
retail sales data will not provide," Alan Ruskin, chief
international strategist at RBS Greenwich, in Greenwich,
Connecticut, wrote in a note.
(Additional reporting by Vivianne Rodrigues; Editing by James
Dalgleish)
