FOREX-Dollar gains broadly, yen dips before election

By Karen Brettell

NEW YORK, July 17 (Reuters) - The dollar rose on Thursday after data showed retail sales rose more than expected in June, following a turbulent session on Wednesday when U.S. President Donald Trump denied reports that he is planning to fire Federal Reserve Chair Jerome Powell.

The dollar has rallied this month in what analysts say is largely consolidation following a sharp selloff for most of this year. The dollar index remains down 9% year-to-date. Rising Treasury yields this month are supporting the dollar’s rebound.

“After having a historic sell-off in the first half, the dollar has begun the second half on firmer footing. It looks like mostly short covering backed by these firmer U.S. interest rates,” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.

The dollar extended gains on Thursday after data showed U.S. retail sales rebounded more than expected in June, while the number of Americans filing new applications for jobless benefits also fell last week.

However, the greenback quickly fell back and traded close to where it was before the data, which Chandler said shows “the lack of near-term conviction.”

Investors are weighing multiple factors that could influence market direction, including the economic impact of Trump’s tariff policies, the U.S. fiscal and debt outlook, and the Fed’s independence.

The dollar tumbled on Wednesday on reports that Trump was planning to fire Powell soon, before paring the drop when Trump denied the news.

The dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro, was last up 0.39% on the day at 98.73, with the euro EUR= down 0.42% at $1.1585.

In other currencies, sterling weakened after data showed British pay growth slowing in May and employee numbers dropping further last month.

The British pound GBP= was last down 0.16% at $1.3398.

Meanwhile, concerns mounted over a pivotal election in Japan and a still elusive trade deal with the U.S. to avoid a punishing rise in tariffs.

Japan's currency fell as polls showed Prime Minister Shigeru Ishiba's coalition was in danger of losing its majority in the upper house.

The yen was weakened 0.46% against the greenback to 148.56 per dollar after touching its weakest level since April 3 in the previous session JPY=.

The Australian dollar slid after jobs data badly missed forecasts and unemployment hit highs not seen since late 2021.

The Aussie AUD= was last down 0.8% versus the greenback at $0.6474.

In cryptocurrencies, bitcoin BTC= fell 1.26% to $118,425.