* Dollar up as crude futures tumble sharply
* China to raise gasoline and diesel prices
* Sterling buoyed by shock jump in UK retail sales
(Recasts, updates prices)
By Lucia Mutikani
NEW YORK, June 19 (Reuters) - The dollar rose versus the
euro on Thursday, boosted by a sharp drop in crude oil prices
and a surge in British retail sales that caused traders to
offload the European single currency to buy sterling.
May's surprise jump in retail sales raised expectations the
Bank of England will raise interest rates, helping to drive the
pound to its highest level in over a week against the dollar
and spark a rally versus the euro.
"It's more about the UK retail sales. We have seen some
buying of sterling and selling of euro/dollar," said Andrew
Busch, global FX strategist at BMO Capital Markets in Chicago.
"We have seen oil come off on the news that China is going
to allow gasoline prices to go higher. As oil came off, the
euro got sold a little bit. We haven't moved very much today;
we have moved mainly around 1.55 ( on euro/dollar)."
The euro fell as low as $1.5467 <EUR=> in overnight trade.
It recovered some losses as data showed factory activity in the
U.S. Mid-Atlantic region slowed further in June. For details,
see [].
The euro last traded at $1.5492, down 0.3 percent on the
day. The New York Board of Trade's dollar index, which charts
the dollar's performance against a basket of six currencies,
rose to a session high of 73.594 <.DXY>.
Sterling rallied to an intraday peak of $1.9744 <GBP=>. It
was up 0.8 percent at $1.9739. The pound also climbed against
the euro, pushing the single currency down 0.9 percent to 78.50
pence <EURGBP=>.
"The UK news has sent sterling higher, driving the sterling
crosses. That's one of the major undercurrents today. Oil is
down, that also dollar positive," said Brian Dolan, chief
currency strategist at Forex.com in Bedminster, New Jersey.
"We are still within recent ranges. The dollar is not out
of the woods yet."
While the Federal Reserve had turned hawkish due to rising
price pressures ignited by record oil prices, analysts believe
it is unlikely to raise U.S. interest rates before year-end as
the economy remains sickly.
U.S. crude futures tumbled sharply after news that China
will raise gasoline and diesel prices. For details, see
[]. High oil prices have fanned inflation
pressures and concerns about their impact on global growth.
A Swiss National Bank decision to leave interest rates
unchanged despite inflation at multiyear highs had some
psychological effect on the market, but analysts cautioned
against reading too much into the move.
There had been suggestions that the SNB's decision could
mean the European Central Bank would not tighten policy further
after an anticipated rate increase in July.
"While the SNB does not adhere to the inflation-targeting
framework of the ECB, both central banks view price stability
as being consistent with CPI being below 2.0 percent per
annum," said Bank of America in a note.
"Our economists still believe that the SNB's next move will
be up, and there is a strong chance that the move could
materialize in September."
Against the Swiss franc, the dollar rose 0.9 percent to
1.0460 francs, reversing earlier losses ahead of the SNB
decision <CHF=>. The franc also fell 0.7 percent versus the
euro to 1.6216 <EURCHF=>.
(Editing by Dan Grebler)
