* Yen and euro weakened by gains in stocks
* Yen rally vs dollar may be nearing end -analyst
* Oil dips after big gains on Tuesday
(Updates prices, adds comment)
By Gertrude Chavez-Dreyfuss
NEW YORK, April 13 (Reuters) - The dollar climbed to a
two-week peak against the euro and a one-week high against the
yen on Wednesday, as gains in global stock markets and improved
export numbers out of China drew investors into riskier bets
than low-yielding currencies in Europe and Japan.
The euro and yen have gained strongly against the dollar in
recent weeks as investors sought traditional safe havens given a
darkening outlook for banks and economic growth, underlined
again by downgraded forecasts from the International Monetary on
Tuesday.
Softer-than-expected U.S. producer prices and retail sales
numbers last month briefly pushed the dollar lower, but
Wednesday's dollar uptrend remained intact.
"The weak retail sales and PPI (producer price index) data
had virtually no impact on the dollar, and it's probably because
there are portfolio flows going into U.S. equities," said
Sebastien Galy, currency strategist at Deutsche Bank (DE:DBKGn) in New
York. "This is giving the dollar a bit of a bid."
Still the outlook for the dollar stayed weak. After gaining
steadily for 1-1/2 years amid U.S. interest rate hike
expectations, the dollar has hit a wall and many in the market
believes the greenback's long-term rally is on its last legs.
Expectations of a deal to stabilize oil output, and what
seems like a bottoming out of expectations for U.S. interest
rate rises, have also helped the dollar.
The dollar index was up 0.8 percent at 94.730 .DXY ,
gaining for the first time in four days.
The euro fell 0.9 percent against the dollar to $1.1284
EUR= . It fell as low as $1.1234, a two-week low. Against the
yen, the euro was down 0.3 percent at 123.26 yen EURJPY= .
The dollar, meanwhile, rose 0.6 percent to 109.21 yen
JPY= , up from lows of 107.61 hit on Monday.
Valentin Marinov, head of G10 FX strategy at Credit Agricole (PA:CAGR)
Corporate and Investment Bank in London believes that the latest
yen rally may be running out of steam. He said that the Japanese
currency's recent strength reflected concerns about excessive
undervaluation.
"These concerns have abated considerably, with dollar/yen
now trading closer to its 'fair value' implied by the purchasing
power parity or the long-term valuation model." That long-term
fair value for the dollar is 105 yen, he added.
On the day, oil was down 1.3 percent and the boost for
commodity-reliant currencies such as the Norwegian crown NOK=
and Australian dollar AUD= , from Tuesday's jump has faded.
Crude, however, remains well above $40 a barrel, which has
allowed all commodity currencies to recover from long-term lows
hit in January.