Dollar drops as U.S. growth fears dog market

NEW YORK, Nov 14 (Reuters) - The dollar slipped on Wednesday as worries about the struggling U.S. housing sector and lingering credit problems weighed on sentiment, leaving the dollar's long-term downtrend intact.

Data showing U.S. retail sales growth slowed slightly in October, in line with expectations, and flat producer prices sustained investors' decisions to keep pushing the dollar toward record lows against the euro.

"Retail and sales and PPI at the margin support a weaker dollar," said Meg Browne, senior currency strategist at Brown Brothers Harriman in New York. "Retail sales supports the view that growth is slowing."

The euro rose 0.3 percent to $1.4643 , within sight of record highs of $1.4752 reached last week. Against the Swiss franc, the dollar fell to the lowest level since April 1995, at 1.1178 francs before recovering to trade at 1.1243, still down 0.2 percent on the day.

Another prominent theme in the market was the rebound in investors' willingness to take bigger risks for a higher return.

Earlier this week, nervousness about the difficult lending environment caused the yen to surge across the board, rising to an 18-month high against the dollar as investors unwound carry trades, in which a low-yielding currency such as the yen is borrowed to fund purchases of higher-yielding ones.



Written by Nick Olivari, Reuters.uk