* U.S. retail sales beat expectations
* Higher-yielding currencies slip on shaky risk appetite
* Euro dips on German ZEW
* Sterling underperforms on expectations of more BoE QE
(Recasts, adds comment, detail and updates prices)
By Nick Olivari
NEW YORK, Sept 15 (Reuters) - The dollar climbed against a
basket of major currencies for the second straight day on
Tuesday as positive U.S. economic data prompted investors to
return to the theme that the U.S. will be at the forefront of a
global economic recovery.
That would make help push up U.S. interest rates and make
U.S. assets more attractive, boosting demand for the dollars to
buy them.
Sales at U.S. retailers rose at their fastest pace in
three-and-half years in August as government-sponsored auto
incentives buoyed demand for motor vehicles, according to data
on Tuesday that showed sales outside the auto sector also were
strong. [].
U.S. producer prices rose more than twice as much as
expected in August on the biggest surge in gasoline prices in
more than 10 years and prices declined less than expected
compared with a year ago, a government report showed on
Tuesday. [].
"There is no question of this being positive data, even
though the cash-for-clunkers program was a huge part of it,"
said Michael Woolfolk, senior currency strategist at the Bank
of New York Mellon in New York. "It's consistent with the story
that the economy has bottomed though not yet in a position for
fiscal and monetary stimulus to be removed"
But investors are looking toward the removal of the
stimulus, leading to higher interest rates which would be good
for the dollar, Woolfolk said.
The dollar index, which measures the dollar's value against
a basket of currencies, rose 0.2 percent to 76.867 <.DXY>,
staying above a one-year low of 76.457 hit last week.
The euro was last at $1.4589, down 0.2 percent on the day.
Against the yen, the dollar rose 0.5 percent to 91.37 yen
<JPY=>, pulling away from a seven-month low hit on Monday.
"What will dictate where we go in terms of dollar/yen and
potentially more broadly for the dollar is how the data pans
out in the United States," said Derek Halpenny, European head
of global currency research at Bank of Tokyo Mitsubishi-UFJ.
"We should have a clear picture in terms of Q3 GDP by the
end of this week. That will potentially dictate movements in
yields at the short end of the curve and potentially offer some
support for the dollar," said Derek Halpenny, European head of
global currency research at Bank of Tokyo Mitsubishi-UFJ in
London.
POUND UNDERPERFORMS
Sterling underperformed after Bank of England Governor
Mervyn King said the central bank was looking at reducing the
rate on commercial banks' reserves, fueling speculation of
further quantitative easing. []
Sterling was down 0.7 percent on the day to $1.6454 <GBP=>
after King's comments which fueled speculation that the BoE may
use yet another device in its quantitative easing toolkit.
The pound erased earlier gains made against the dollar
after stronger than expected British house prices and a
smaller-than-expected fall in inflation.
Sterling also hit a four-month low versus the euro on
King's comments.
The euro also was hurt by Germany's ZEW survey indicating
investor sentiment had risen less than expected in September.
The think tank's economic sentiment index rose to 57.7 from
56.1 in August, but below forecasts of 60.0. An index on
current conditions improved to -74.0 from -77.2. Economists had
forecast a reading of -68.0. []
The Australian dollar erased earlier losses after minutes
of the Reserve Bank of Australia's last policy meeting gave
little guidance to markets on when the cash rate would be
raised from its record low of 3 percent. []
The Australian dollar stood at $0.8580 <AUD=>, down 0.4
percent on the day.
The dollar reversed earlier losses versus the Swiss franc
to gain 0.5 percent to 1.0393 francs after Swiss industrial
orders fell 17.5 percent in the second quarter compared with a
17.6 percent fall in the year-ago quarter.
The day marks the one-year anniversary of the collapse of
Lehman Brothers, which for many stood as the epicenter of the
financial crises from which the global economy has yet to
recover. For more see []
(Reporting by Nick Olivari; Editing by Theodore d'Afflisio)
