FOREX-Dollar hits speed bumps, euro gains slight reprieve

* Dollar index off peak after biggest one-day fall in a month

* Markets book profits after disappointing U.S. retail data

* Euro off 12-year trough vs USD

By Ian Chua

SYDNEY, March 13 (Reuters) – The U.S. dollar nursed modest losses early on Friday after nervous investors booked profits in an extended rally that has driven the greenback to successive multiyear peaks this week.

An unexpected fall in U.S. retail sales gave the market an excuse to sell the dollar, which promptly retreated from a 12-year high against a basket of major currencies.

The dollar index last stood at 99.272, having slid 0.4 percent on Thursday – its biggest one-day fall in a month. The index earlier rose as far as 100.060, a high not seen since mid-April 2003.

“The overnight session witnessed the long overdue consolidation in USD,” analysts at CitiFX wrote in a research note to clients.

“Our trading desk thinks it represents a generally healthy corrective move. Indeed, we have seen good USD demand on dips. Turnover is very high across the G10 space.”

The dollar index, however, is still on track to end the week up more than 1 percent, extending last week’s 2.5 percent rally.

With no major market-moving economic data due on Friday, the dollar could continue to consolidate a little further, traders said.

Against the yen, the dollar slipped to 121.34 yen, pulling away from a near eight-year high of 122.04. It also lost ground against the euro, which popped up to $ 1.0621, from a 12-year trough of $ 1.0494.

The common currency was also given a bit of a reprieve by a bounce in some euro zone government bond yields, which hit record lows this week as the European Central Bank kicked off its 1 trillion euro bond buying program.

German 10-year bond yield, for example, rebounded to 0.249 percent from an all-time low of 0.187 percent.

Concerns about Greece continued to bubble in the background. The cash-strapped country has embarked on technical talks with its international creditors to agree reforms and unlock further funding, but there is growing frustration with Athens.

The greenback also eased against commodity currencies such as the Australian dollar, which climbed back above 77 U.S. cents from a six-year low of $ 0.7561 set on Wednesday.

Sterling, however, made no headway against the broadly softer dollar after Bank of England Governor Mark Carney signalled he was in no rush to raise interest rates, dashing some expectations of a hike in early 2016.

The pound plumbed a 20-month low of $ 1.4850 and was last trading at $ 1.4883.

(Editing by G Crosse)

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