* Dollar falls vs yen on retail sales, jobless claims
* ECB keeps rates on hold, Trichet mentions strong dlr
* Concern about Greece weighs on euro
* Aussie boosted by better-than-expected jobs data
(Adds comments, details. Updates prices)
By Vivianne Rodrigues
NEW YORK, Jan 14 (Reuters) - The dollar fell versus the yen
on Thursday as lackluster U.S. data reinforced the view the
Federal Reserve will keep rates on hold in the foreseeable
future.
But the U.S. currency held gains versus the euro after the
European Central Bank kept policy unchanged as expected and
President Jean-Claude Trichet reiterated the importance of a
strong dollar. For details, see []
Economic reports showed U.S. retail sales unexpectedly fell
last month, while jobless claims rose last week.
[] and []
Analysts said the combination of Thursday's data with a
weaker-than-expected payrolls report last Friday raised concern
about the outlook for the global economy.
"The U.S. continues to recover at a really slow pace," said
Joe Manimbo, a currency trader at Travelex Global Business
Payments, in Washington D.C. "If you add that to last week's
jobs data, that certainly dampens expectations of an early Fed
rate hike. Consequently, that sets the stage for a weaker
dollar."
In late morning trading in New York, the dollar was 0.3
percent lower at 91.13 yen <JPY=> after hitting a session low
of 91.08, according to Reuters. It traded as high as 92.04 yen
before the release of the data.
Sentiment toward the U.S. dollar was knocked earlier by New
York Federal Reserve Bank President William Dudley and Chicago
Fed President Charles Evans, who said separately the U.S.
central bank would need to be certain the economic recovery was
firmly in place before tightening policy.
Meanwhile, the ECB kept its main interest rate on hold at a
record low of 1 percent for the eighth month running. It also
left its overnight deposit rate, which acts as a floor for
money markets, at 0.25 percent and its marginal lending rate at
1.75 percent. []
The euro reacted little to the ECB decision but lost ground
after Trichet commented on the importance of a strong U.S.
dollar. He also mentioned Greece and said the country had much
work in front of it. [].
The European currency was last 0.3 percent down at $1.4475
<EUR=> after trading as high as $1.4555 earlier.
GREEK WOES
Investor confidence in Greece has fallen as its deficit has
ballooned and credit ratings have been cut, which also weighed
on the euro in the past couple of months.
Trichet said the idea of a country such as Greece leaving
the euro zone was "absurd," but warned that there would be "no
special treatment" from the ECB if one of the euro's 16-member
countries looked in serious economic danger.
The spread between Greek and German government bonds
widened and Greek credit default swaps hit a record high on
Thursday [] even as the Greek government presented
parts of a three-year plan to slash its budget deficit
[].
"A lot of people are very cautious about the fiscal
situation in Greece," said Niels Christensen, currency
strategist at Nordea in Copenhagen. "This seems to have stopped
the uptrend in euro/dollar."
The Australian dollar rose against the yen and hit a
two-month high versus the U.S. dollar earlier after data showed
Australia's jobless rate at an eight-month low, adding to the
case for higher interest rates. []
The Australian dollar was last up 0.6 percent at $0.9292
<AUD=D4> after hitting $0.9331, close to the 2009 high of
$0.9407, according to Reuters data.
Investors also awaited U.S. corporate earnings, with
results from Intel Corp. <INTC.O> and JPMorgan Chase <JPM.N>
due out this week.
(Additional reporting by Steven C. Johnson and Wanfeng Zhou in
New York, Tamawa Desai in London; Editing by Kenneth Barry)
