Posted: 12 June 2009 0608 hrs

A euro coin and a US dollar bill.

NEW YORK: The US dollar weakened against other major currencies on Thursday as fresh data on American retail sales and jobless claims kept economic recovery hopes alive, pushing investors away from the safe-haven greenback.

The euro, viewed by the market as a riskier currency, rose to 1.4106 dollars in New York trading at around 2100 GMT from 1.3978 dollars on Wednesday.

The dollar also fell against the Japanese currency, to 97.60 yen from 98.12 yen.

Traders said appetite for risk increased amid growing signs the United States could recover late this year.

The US government said on Thursday that retail sales rose in May for the first time in three months and in line with market expectations while new claims for unemployment benefits fell last week for the fourth consecutive week.

The data came "on top of a number of recent economic releases that are reinforcing speculation that the worst of the global recession is over," said Andy Douglass of PNC Bank.

"Just as the safety of US Treasuries were sought and the US dollar was bought as the recession deepened, it is now being sold as investors are more willing to invest in 'riskier' assets," he said.

The biggest beneficiaries of the move out of US dollars on Thursday were the British, Canadian, Australian and New Zealand currencies, Douglass said.

Michael Woolfolk of the Bank of New York Mellon said dollar sentiment dampened on the back of mostly better than expected US economic data and a "successful" 30-year US Treasury auction on Thursday .

They "reduced risk aversion and bolstered carry trades away from the safe-haven greenback," he said.

Bond yields fell after the strong demand for the 30-year bonds but remain at relatively high levels that have pushed up home mortgage rates.

"Strong demand at the Treasury's auction of 30-year bonds Thursday is pushing yields lower, but a substantial further decline is needed to maintain the recent stabilization in home sales and further chances for economic recovery," said Ryan Sweet at Moody's

Boris Schlossberg, director of currency research at Global Forex Trading, cautioned against reading too much on the US retail sales data, saying the positive number was chalked up on the back of higher gasoline prices.

"In general, the takeaway from the retail sales number is that consumer demand appears to have stabilised but so far shows few signs of pick up," he said.

"Furthermore, the troubling rise in gasoline prices will no doubt affect disposable income going forward and could dampen demand in the months to come," he said. "Overall eco data was inconclusive."

The dollar also fell Thursday to 1.0701 Swiss francs from 1.0807 a day earlier.

The pound rose to 1.6588 dollars from 1.6360 dollars. - AFP/de

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