LONDON, Oct 16 - The dollar rose half a percent to one-week peaks versus the euro and yen on Thursday, boosted by upbeat U.S. data in the previous session. The dollar rebounded this week from three-year lows against the yen and three-month lows against the euro as strong U.S. corporate earnings outweighed concern about the United States' huge current account deficit. Upward revisions to back-month U.S. retail sales data and a record high Empire State Manufacturing Survey index of business conditions in the previous session gave the greenback further support. "Sentiment towards the dollar has improved after yesterday's better than expected U.S. numbers and data later today is expected to give further confirmation of the brighter growth outlook," said Paul Robson, international economist at Bank One. The dollar strengthened to $1.1571 per euro by 0800 GMT, regaining almost three cents from its three-month lows of $1.1860 last week. The dollar also rallied to 110.32 , two yen above last week's three-year lows. Wariness of yen-selling intervention by the Japanese authorities continues, after record levels of official yen sales this year.
DATA SLEW
Markets are seeking fresh direction from a wave of U.S. data due on Thursday. First-time claims for jobless benefits for last week, due at 1230 GMT, are forecast at a median 388,000 new filings, compared with 382,000 in the previous week. Consumer prices at 1230 GMT are forecast to show a rise of 0.2 percent in September after a 0.3 percent rise in August. Industrial production for September, at 1315 GMT, is expected to show a median 0.4 percent rise in output versus a 0.1 percent rise in August. The Philadelphia Federal Reserve's business activity survey for October, due at 1600 GMT, is expected to show a reading of 16.0 versus 14.6 in September.
BUSH TALK
U.S. President George W. Bush is slated to meet Japanese Prime Minister Junichiro Koizumi on Friday, possibly to discuss their currency policies. While expressing support for a strong dollar, Bush said earlier in the week that markets should determine currency rates -- remarks initially taken by the market as a warning against Japanese yen-selling intervention, which sent the greenback tumbling. U.S. Treasury Secretary John Snow said late on Wednesday the Bush administration's push for flexible exchange rates was not targeted at any particular country and should apply to every region of the world. Snow testifies before the Senate Banking Committee at 1400 GMT. Meanwhile, Zembei Mizoguchi, a senior Finance Ministry official, said that Japan agreed with the United States' declared stance of supporting a strong dollar and its view that currency rates should be set by markets. He also reiterated that currencies should move in a stable manner, noting that the recent rise in the yen was starting to correct on its own. "If President Bush repeats what he's just said when he is in Tokyo, that won't move forex markets much," said Etsuko Yamashita, market economist at Sumitomo Mitsui Banking Corp in Tokyo. "But I think the dollar is still on a declining trend in the medium-term given the problem of the U.S. current account deficit. Mr Bush probably wants a weak dollar even if he doesn't say so," she added.//