* ECB meeting likely to be overshadowed by weekend EU summit
* Biggest faller vs dollar is British pound
* Norwegian crown falls 0.6% vs dollar, euro
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Olga Cotaga
LONDON, July 16 (Reuters) - The U.S. dollar strengthened on
Thursday as investors focused on poor Chinese retail sales
instead of its stronger than expected economic growth last
quarter, with the focus now shifting more to a European Union
summit this weekend.
The European Central Bank meeting later in the day will most
likely be overshadowed by the summit, at which European
countries are expected to vote on a 750 billion euro recovery
fund proposed by the European Commission to revive euro area
growth.
The euro was last trading down 0.1% at $1.1401 EUR=EBS ,
though against the safe-haven Japanese yen, the dollar was
trading neutral at 106.95 JPY=EBS .
The biggest mover was the British pound as it remained
strongly correlated to risky assets, falling last by 0.3% to
$1.2548 GBP=D3 .
Surging U.S. virus cases dampened sentiment and weighed on
equity markets, which in turn injected some strength in the U.S.
dollar, a proxy for global risk sentiment.
"No one really wants to buy a lot more (equities) here
because they're concerned about a second wave of COVID, they're
concerned about the pace of corporate earnings deterioration,"
said Stephen Gallo, European head of FX strategy at BMO Capital
Markets.
"But equally, they don't want to be massively short either
because they know the central banks are active, and I think
that's probably one of the reasons why we're doing this back and
forth," he added.
Simmering Sino-U.S. tensions also added to broadbased dollar
strength.
U.S. President Donald Trump has not ruled out additional
sanctions on top Chinese officials over Beijing's crackdown on
Hong Kong, a White House spokesman said on Tuesday. The New York Times also reported his administration is
considering a sweeping ban on travel to the United States by
Chinese Communist Party members, citing four unnamed people with
knowledge of such discussions. China's 3.2% economic growth last quarter easily beat market
expectations for 2.5%. But an unexpected drop in retail sales -
for a fifth straight month - was an unwelcome harbinger of
possible problems ahead for the rest of the world as more
countries relax lockdowns and allow businesses to reopen.
"The retail sales printing weak is showing that China
doesn't have much of a private consumption engine," Gallo said.
The growth-sensitive Australian dollar slipped under 70
cents after the data and was last down 0.2% at 69.92 versus the
greenback AUD=D3 .
Elsewhere, the Norwegian crown fell by 0.6% both against the
dollar and the euro to 9.3290 NOK=D3 and 10.6345 EURNOK=D3
respectively.