* Dollar slips, Asia summit offers limited FX direction
* US retail sales rise in Oct,NY manufacturing index slips
* U.S., China fail to agree on currency position
* Dollar index hovers near 15-month low
(Adds comment, updates prices, adds detail, changes
dateline and byline)
By Steven C. Johnson
NEW YORK, Nov 16 (Reuters) - The dollar slipped on Monday
as U.S. retail sales rose and traders saw discord over exchange
rates among Asian and U.S. leaders as a cue to sell the
greenback against free-floating currencies such as the euro.
The U.S. currency also came under pressure with European
shares rising 1 percent and gold hitting a fresh record high,
suggesting increased investor risk tolerance.
A bigger-than-expected 1.4 percent rise in U.S. retail
sales last month also encouraged risk given market expectations
for U.S. interest rates to stay low well into 2010. For more,
see []
"The data was by and large decent, and since good data at
this point isn't going to ease the Federal Reserve's underlying
concerns about employment and credit conditions, they're not
likely to raise rates soon," said Matthew Strauss, senior
currency strategist at RBC Capital Markets in Toronto.
Low U.S. interest rates make the dollar less attractive to
global investors, particularly if other countries start lifting
interest rates before the Fed.
The euro rose 0.3 percent to $1.4966 <EUR=> and sterling
rose 0.2 percent to $1.6727 <GBP=>. The dollar was down 0.3
percent at 89.41 yen <JPY=>, with the yen getting a modest
boost from data showing Japan's economy grew at its fastest
pace in more than two years between July and September.
An index of New York State November manufacturing activity
fell by more than expected, though its market impact was
limited. []
EXCHANGE RATE DISCORD IN ASIA
Investors were also emboldened to sell the dollar against
major currencies because the outlook for the dollar's exchange
rate against China's yuan remained clouded.
A communique at the close of a two-day Asia Pacific summit
in Singapore omitted a reference to "market-oriented exchange
rates," suggesting China may not be ready to let the yuan rise
gradually against the dollar. []
Traders said that bolstered market resolve to sell the
dollar against the euro and other freely floating currencies
instead. The yuan's peg to the dollar keeps the Chinese
currency weak against its U.S. counterpart.
"Chinese currency policy is unchanged, which means that
they'll still be forced to accumulate and swap more and more
dollars for euros," said Neil Mellor, currency strategist at
Bank of New York Mellon in London.
The disagreement between Washington and Beijing comes as
U.S. President Barack Obama visits China this week.
The dollar has been battered in past months on speculation
that U.S. rates will stay at virtually zero until well into
next year, keeping the return on U.S. assets lower than those
in other countries including Australia and Norway, where
interest rates have already started rising.
As such, analysts expect the euro to climb above $1.50 in
the near term, despite two failed attempts to make a sustained
break above the level in the past month. A climb above $1.5064
-- last month's peak -- would mark its highest in 15 months.
Recent data on speculator positioning shows net short
positions in the U.S. currency rising against the euro, the yen
and the Swiss franc last week.
(Additional reporting by Naomi Tajitsu and Jamie McGeever
in London; Editing by Chizu Nomiyama )
