FOREX-Dollar stuck near three-week lows ahead of data
* Graphic: World FX rates in 2018 By Saikat Chatterjee
LONDON, Oct 16 (Reuters) - The dollar was mired near athree-week low on Tuesday thanks to tepid U.S. data overnight,though broadly firmer U.S. Treasury yields prevented a sell-off.
The data, showing U.S. retail sales barely rose inSeptember, was a rare blemish in a run of economic indicatorswhich this month pushed 10-year U.S. Treasury yields to theirhighest levels for more than seven years above 3.22 percent. U.S. industrial output data is due later today.
"We are seeing a cautious retreat in the dollar rather thana significant correction and incoming U.S. data will be in thespotlight for now," CIBC Capital Markets head of G10 FX strategyJeremy Stretch said.
The dollar index was broadly flat at 95.11, justabove last week's three-week low of 94.92.
While the dollar struggled against its developed marketpeers, it managed to strengthen against emerging marketcurrencies and pinned the Chinese yuan to a two-month low.
"The dollar's outlook continues to be strong againstemerging market currencies due to more expected U.S. rate hikesand the trade conflict between the U.S. and China," Rabobankcurrency strategist Piotr Matys said.
One emerging market currency index held nearits lowest levels for 1-1/2 years, indicating the divergence.
The euro remained broadly on the back foot,holding around $1.1573 against the dollar after the Italiancabinet's sign-off on an expansionary 2019 budget that sets up ashowdown with the European Union over compliance with its rules. However, the single currency rose against the Swiss franc, suggesting supportive risk appetite for euro zoneassets.
The New Zealand dollar advanced 0.24 percent versusthe greenback to trade at 0.6567 as the domestic inflation ratecame in higher than expected in the third quarter. The Japanese yen weakened by 0.19 percent and changedhands at 111.97. The yen had hit a one-month high of 111.61 onMonday.
The Swiss franc weakened 0.17 percent versus thedollar to trade at 0.9886, after strengthening half a percentovernight.
Sterling rallied half a percent after jobs data beatexpectations before a crucial EU summit this week.
(Reporting by Saikat ChatterjeeEditing by Louise Ireland)
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