FOREX-Dollar dips after rise in U.S. retail sales

* Dollar index falls modestly after U.S. data
* Euro hovers near four-month high ahead of EU conference
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

(New throughout; changes dateline, previously LONDON)
By Kate Duguid
NEW YORK, July 16 (Reuters) - The safe-haven U.S. dollar
fell modestly in morning trading on Thursday after domestic
retail sales data for June came in better than expected, though
the move was limited by jobless claims and a drop in U.S.
equities.
Retail sales in June increased for the second consecutive
month, according to a report from the Commerce Department. The
U.S. dollar index =USD , which measures the currency against a
basket of six rivals, was last down 0.07% to 95.940.
A separate report from the Labor Department on Thursday
showed 1.3 million people filed for state unemployment benefits
during the week ending July 11, slightly down from 1.31 million
in the prior period. The report nevertheless showed that a
resurgence in new COVID-19 cases was chipping at the budding
recovery. The three major U.S. stock indexes all fell as a result,
with the S&P 500 index .SPX last down 0.64%.
"The data in general was pretty constructive on U.S. retail
sales. I think however that for foreign exchange, things haven't
really changed," said Mazen Issa, senior foreign exchange
strategist at TD Securities.
That is, he explained, because since the bottom in the stock
market on March 23, foreign exchange markets have been highly
correlated with equities.
"The data in and of itself hasn't been a focal point for
currency markets, it has really been about risk asset
performance. And that has been motivated by the notion that as
poor as the data may be in future months, that you have a fiscal
and monetary backstop. There is a lot of faith being placed in
central banks and the collapse in forex volatility has been
reflective of that."
The euro was little moved by the outcome of the European
Central Bank meeting, last trading up 0.10% to $1.142 EUR= .
The meeting was seen as something of a non-event by
analysts, who said it was overshadowed by the EU summit, at
which European countries are expected to vote on a 750 billion
euro ($856 billion) recovery fund to revive euro area growth.
"Going into the weekend a lot of focus will be on the EU
leaders' summit, a lot of focus on that recovery fund," said
Issa.