But traders were cautious ahead of quarterly results from other U.S. banks, while lackluster data from Germany weighed on the euro and kept it rooted in a broad range against the dollar.

The slight rise in risk appetite also boosted higher-yielding currencies such as the Australian dollar at the expense of both the yen and U.S. dollar, which tend to see their biggest gains when investors grow anxious and buy them as safe havens.

“Retail sales were better than expected, so that’s a bit of good news, but there’s been little follow-through as the market is uncertain which way it wants to trade,” said Greg Salvaggio, vice president of trading at Tempus Consulting in Washington.

The retail sales data came with some caveats, though, as traders noted much of the 0.6 percent gain in June retail sales was driven by higher gas prices.

Salvaggio also said data showing a sharp rise in U.S. producer prices last month, which pushed government bond yields up, may stoke inflation fears.

Midmorning in New York, the euro fell 0.1 percent to $1.3967 and rose 0.1 percent to 130.02 yen . The dollar edged up 0.1 percent to 93.10 yen . The yen had briefly erased losses against the dollar, pushing the greenback down to 92.72 yen as stocks dipped into negative territory, but fell anew as Wall Street recovered.

The euro’s woes were tied partly to a monthly poll of economic sentiment from German think-tank ZEW, which defied upbeat market expectations and fell in July for the first time in nine months.

Currencies considered higher risk, however, did better. Australia’s dollar rose 0.8 percent to $0.7889 , and sterling added 0.4 percent to $1.6297 . Strong Australian business confidence data and better-than-expected UK retail sales and home price data added to demand for both.

Source: NEW YORK, July 14 (Reuters)

Oil slipped further below $36 a barrel on Thursday as worries over the health of the global economy and forecasts for a hefty fall in global energy demand weighed on sentiment.

Global economic downturn is taking its toll on oil consumption and supply still appears to be outstripping demand in many parts of the world, despite production cuts by members of the Organization of the Petroleum Exporting Countries.

Oil prices continued to weaken despite a deal in the U.S. Congress on Wednesday on $789 billion in new spending and tax cuts.

U.S. light crude for March delivery was down 54 cents at $35.40 at 1124 GMT.

London Brent crude was up 21 cents at $44.49, stretching its premium over U.S. oil to near the record levels above $9 hit last month.

Traders said the short-term direction of the market was being dominated by movements in stock markets, which opened lower in Europe on Thursday, and the dollar, which rose against a basket of major currencies.

“Overall the market appears to be slipping,” said a dealer at a large London brokerage. “Oil demand is falling and a lot of attention is being paid to macro-economic data.”

U.S. JOBLESS

Traders awaited U.S. weekly jobless claims and January retail sales data due at 1330 GMT on Thursday, which will give a clearer indication of how the U.S. economy is faring.

Oil has tumbled around 10 percent this week, having fallen four sessions in a row since last Friday, on demand worries and fears the U.S. bank rescue plan would not go far enough to revive the ailing financial sector.

Oil prices took a battering on Wednesday after the U.S. Energy Information Administration said domestic crude stocks had increased 4.7 million barrels to 350.8 million in the week to Feb. 6, against a forecast for a rise of 3.1 million.

The latest increase in U.S. crude stocks comes on the heels of a combined rise of more than 13 million barrels in the prior two weeks, and crude inventories are now moving significantly above their five-year range.

Oil’s losses were further exacerbated by a separate report from the International Energy Agency forecasting global demand to contract by nearly a million barrels per day (bpd) — the most since 1982 — to 84.7 million bpd in 2009.

Underlining the damage caused by the global financial crisis, data showed global trade activity in goods and commodities had dropped.

The March Brent ICE futures contract expires on Thursday and traders said they expected the premium for Brent over U.S. crude futures, also known as WTI, to stretch further, reflecting very high stock levels at Cushing, the delivery point for the U.S. futures contract.

“We are probably going to see WTI maintain or worsen its discount to Brent,” said Harry Tchilinguirian, analyst at BNP Paribas in London.

LONDON, Feb 12 (Reuters)

So… The euro reached a new record high overnight of 1.6038! WOW! This was reached based on the fears that credit problems in the U.S. are going to put the kyboshes on what little economic growth we now have. But the shine on the euro was rubbed out by a very weak ZEW… German Investor Confidence as measured by the think tank, ZEW, fell to a record low this month on the surging inflation problems, and rising interest rates. So for now, the euro is back below 1.60, but hear me now and listen to me later… This ZEW will soon be in the rear view mirror, and the euro won’t have that albatross around its neck as it revisits its overnight high…

And don’t look now, but the Aussie dollar is up to 98-cents! WOW! I’ve said for about 8 months that I wouldn’t be surprised to see the A$ at parity to the green/peachback… It certainly has that parity look about it does it not? The last time the A$ was 98-cents was 1983… 25-years ago… 1/4 of a century, and all that!

The U.K. pound sterling is back to $2, which seems totally unlikely an event as possible, but it has happened, so, go on and crow if you thought I was wrong to say the pound was going to have problems once the Bank of England (BOE) started its rate cut cycle…

And the Canadian dollar / loonie has crept back to parity! It’s been a long, time coming… It’s going to be a long, time gone… (a little CSNY)…

And, the poor, downtrodden, Japanese yen, is at the bottom of the 105 handle, and looking like it wants to trade with a 104 next to it! I had to laugh at a story I saw flash across the screen… The title was… “Yen may gain as Bank of Japan (BOJ) is more likely to raise rates than the Fed”. Now that’s funny! Ok, stay with me on this… A month ago, the dollar was getting bought like Pet Rocks because Fed Chairman, Big Ben Bernanke hinted that he was going to be an inflation fighter, thus interest rates would go higher… But here we are a month later, there’s been no sign of Big Ben the inflation fighter, and now it’s deemed that the BOJ could raise rates before the Fed!

And the dollar bulls wonder why their currency is getting sold like funnel cakes at a state fair? Why don’t the dollar bulls give Big Ben a call on the telly, and see if he can’t help them out? Oh… That’s right, Big Ben doesn’t take calls from just anyone… According to our friend, Jim Rogers, on his Bloomberg TV interview yesterday morning… “Ben Bernanke and Paulson only take calls from their Wall Street Buddies”… HA!

Speaking of Jim Rogers… He was full of you know what and vinegar yesterday morning… He didn’t pull any punches and said what was on his mind… You should have seen me here at the trading desk, Jim Rogers would say something, and I would clap and hoot and holler! At one point, Rogers said that the Gov’t’s plan to rescue Freddie and Fannie was “an unmitigated disaster”…

So… Remember early in the year when I kept telling you that there would be another “risk event” this year, and then we had the Bear Stearns meltdown, but that wasn’t it for the “risk events” , and I kept harping that there would be more? Well… It’s not like I was wishing, and hoping and thinkin’ and praying for these things to happen… I was simply pointing out that the world today has too many “risk events” all over, and with the credit woes in the U.S. and the housing and mortgage meltdowns, I just figure it would touch here a few times.

Anyway… What I’m trying to get at here is simply that these are the things I kept telling people to protect themselves from by diversifying into currencies and precious metals… I also, recall, the wink, wink, I gave you when Gold was trading below $900 about a month ago… Today, Gold is $983!

OK, enough with all the “I told you so” talk! Let’s talk about today… Well, today has “risk” written all over it! Big Ben goes to the “hill” to talk to lawmakers about the economy and Fed direction… You have to think that before the Meltdown last week of Freddie and Fannie (see more talk about them, I just can’t leave them on the side of the road!), that Big Ben would go to the “hill” and talk the inflation fighter talk… But now… Not now… Not with the financial sector in meltdown mode… So this is a double-edged sword… If he doesn’t go and sound hawkish, then the markets will take that as no rate hike is coming and take the dollar to the woodshed again… (you would think by now that the dollar would have gotten used to these beatings!)

Besides Big Ben, we get a ton-o-data today… PPI for June… Retail Sales for June… And Business Inventories for May… Retail Sales is the Big Kahuna of data today… And I would think that given the tax rebate checks that were still being mailed in June, Retail Sales would remain somewhat robust… Wait till July’s number, I saw all the shopping bags from my beautiful bride’s trip to Chicago this morning! But that’s for next month! For now, PPI poses a treat to future Consumer inflation, so this one plays big too…

If any of this stuff comes in worse than expected, we could see the dollar not only get taken to the woodshed, but told to go pick the switch that it will get beaten with.

Source: Credit Woes Sink The Dollar!