* U.S. retail, industrial data offset weak inflation
readings
    * Euro retreats after touching two-week high vs dollar 
    * Chinese yuan slips after mixed domestic data
    * Graphic: World FX rates in 2018 http://tmsnrt.rs/2egbfVh

 (Updates market action, changes dateline, previous LONDON)
    By Richard Leong
    NEW YORK, Sept 14 (Reuters) - The dollar rose against a
basket of currencies on Friday, rebounding from a near
1-1/2-month low, as upbeat U.S. economic data and higher
Treasury yields rekindled some investor appetite for the
greenback.
    The world's top reserve currency was still on track for a
weekly loss as reduced trade tensions between China and the
United States, together with encouraging developments between
Britain and the European Union on terms for Britain's exit from
the economic bloc, pared safe-haven demand for the dollar.
    "Generally today's data showed strong results, which are
supporting the dollar. Higher yields are also giving it a
boost," said Brian Daingerfield, macro strategist at NatWest
Securities in Stamford, Connecticut.
    The U.S. Commerce Department said domestic retail sales rose
0.1 percent in August, the smallest gain in six months, but July
figures were revised higher, supporting the view of solid
consumer spending in the third quarter.
    Consumer spending, which accounts for two-third of the U.S.
economy, will likely hold firm as consumer optimism improved to
its strongest since March, according to the University of
Michigan. 
    Another bright spot was a 0.4 percent increase in industrial
output last month.  urn:newsml:reuters.com:*:nEMNI960T1
    Friday's data offset inflation data this week which fell of
expectations, causing traders to dial back their bets that
inflation is accelerating, analysts said.
    The data also lifted Treasury yields, with the 10-year yield
 US10YT=RR  touching 3 percent for the first time in six weeks.
    At 10:58 a.m. (1458 GMT), an index that tracks the dollar
against six major currencies  .DXY  was up 0.25 percent at
94.753, trimming its weekly decline to 0.6 percent.
    The euro  EUR=EBS  climbed to a two-week high earlier on
Friday following the disappointing U.S. inflation data before
retreating against the greenback. The common currency was down
0.2 percent at $1.16665, EBS data showed.
    Sterling  GBP=D3  was 0.25 percent lower at $1.3073 after
hitting $1.3145 earlier on Friday, its highest level since July
31, according to Reuters data.
    Brexit talks are set to intensify over the coming week, with
the first of three summits that EU leaders hope will settle an
agreement for departing Britain within the next two months.
 urn:newsml:reuters.com:*:nL5N1W024I
    China's offshore yuan slipped 0.27 percent to 6.8641 per
U.S. dollar  CNH=EBS .
    Data on Friday showed China's investment growth for August
fell to a new record low, while industrial output and retail
sales for the month rose more than expected.  urn:newsml:reuters.com:*:nB9N1VS016
    Chinese officials welcomed an invitation from Treasury
Secretary Steven Mnuchin for new talks to resolve the Sino-U.S.
trade conflict, although comments from U.S. President Donald
Trump tempered market expectations.  urn:newsml:reuters.com:*:nL3N1VZ2MA
========================================================
    Currency bid prices at 10:59AM (1459 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1667        $1.1688     -0.18%         -2.74%      +1.1721     +1.1655
 Dollar/Yen       JPY=        112.0700       111.9200    +0.13%         -0.53%      +112.0900   +111.7600
 Euro/Yen         EURJPY=     130.77         130.83      -0.05%         -3.26%      +131.1100   +130.5700
 Dollar/Swiss     CHF=        0.9658         0.9653      +0.05%         -0.87%      +0.9670     +0.9635
 Sterling/Dollar  GBP=        1.3073         1.3105      -0.24%         -3.25%      +1.3142     +1.3074
 Dollar/Canadian  CAD=        1.3036         1.2996      +0.31%         +3.65%      +1.3047     +1.2983
 Australian/Doll  AUD=        0.7178         0.7192      -0.19%         -7.99%      +0.7216     +0.7170
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1270         1.1285      -0.13%         -3.58%      +1.1304     +1.1262
 Euro/Sterling    EURGBP=     0.8924         0.8920      +0.04%         +0.46%      +0.8932     +0.8898
 NZ Dollar/Dolar  NZD=        0.6560         0.6566      -0.09%         -7.42%      +0.6595     +0.6559
 Dollar/Norway    NOK=        8.2414         8.2156      +0.31%         +0.42%      +8.2687     +8.2112
 Euro/Norway      EURNOK=     9.6165         9.6082      +0.09%         -2.36%      +9.6415     +9.6038
 Dollar/Sweden    SEK=        9.0220         8.9515      +0.57%         +10.00%     +9.0563     +8.9474
 Euro/Sweden      EURSEK=     10.5281        10.4680     +0.57%         +7.00%      +10.5658    +10.4640
  

 (Additional reporting by Tommy Wilkes in LONDON
Editing by Toby Chopra and Meredith Mazzilli)
 ((richard.leong@thomsonreuters.com; +1 646 223 6313; Reuters
Messaging: richard.leong.thomsonreuters.com@thomsonreuters.net;
Twitter @RichardLeong2))