* U.S. retail sales data boosts greenback
* Norway's crown falls after Norges Bank flags uncertainty
* Aussie rises on employment data
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Recasts after U.S. data, adds details)
By Tommy Wilkes
LONDON, Aug 15 (Reuters) - The dollar rebounded and rose
against the yen on Thursday as better-than-expected retail sales
data in the United States helped offset fears that the U.S.
economy could be headed for a recession.
Foreign exchange markets have remained relatively calm
despite big moves in bond markets this week, where investors
have piled into government debt in anticipation of a global
growth slowdown.
But the safe-haven Japanese yen has strengthened as
investors looked for safety.
After earlier rising as European stock markets fell and
investors flooded into safer assets, the yen then weakened. Data
showing a bigger-than-expected rise in retail sales in July
boosted the dollar. The latest turbulence in financial markets was triggered by
the first inversion in the U.S. Treasury yield curve
US2US10=TWEB for 12 years.
Such an inversion, where two-year yields trade higher than
10-year yields, has preceded previous economic recessions.
"Market-related headlines this morning have been dominated
by yield curve inversion and the recessionary implications that
follow," Rabobank said in a note to clients.
Sentiment was already fragile after economic data from China
and Germany earlier in the week revealed the extent of the
damage the China-U.S. trade dispute is causing to the world
economy.
The dollar rose 0.3% against the yen to 106.19 JPY=EBS .
On Wednesday, the yen had rallied 0.8% against the
greenback, its biggest daily gain in two weeks.
The dollar index .DXY , which measures its value against a
basket of six major currencies, erased its earlier losses and
was last at 97.949, unchanged on the day.
The euro edged higher against the dollar, rising 0.1% to
$1.1145 EUR=EBS .
The euro was also ahead against the Swiss franc, rising 0.2%
to 1.0863 francs per euro EURCHF=EBS .
NORWAY'S CROWN FALLS
Elsewhere, Norway's crown weakened after its central bank,
the Norges Bank, said its policy outlook was now more uncertain,
raising doubts about whether it would raise rates later in 2019.
The central bank has been an outlier with its plans to hike
rates while most policymakers turn more dovish in the face of
worsening global growth.
"We regard this as a signal that Norges Bank wants to gain
flexibility in order to evaluate important incoming domestic
data and global developments before deciding on the next
possible rate hike," said SEB strategist Erica Blomgren Dalstø.
The crown was last down 0.1% against the euro at 10.019
crowns EURNOK=D3 . The Australian dollar AUD=D3 rose as much as 0.5% to
$0.6791 after data showed the Australian economy had added a
forecast-busting 41,100 new jobs in July.
However, reflecting the rising global economic risks,
futures markets still imply an 84% chance of a quarter-point
rate cut to 0.75% in October, with a cut by November seen as
certain.
Reserve Bank of Australia Deputy Governor Guy Debelle
highlighted the risks from the trade war in a speech on
Thursday, saying it could trigger a self-fulfilling global
downturn. Sterling rallied to $1.2122, up 0.5% on the day GBP=D3 , on
better-than-expected retail sales data for July and hopes that a
no-deal Brexit can be avoided.
(Editing by Angus MacSwan, Hugh Lawson and Kevin Liffey)