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Dollar recovers after Fed chief firing rumours sparked

selloff

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European shares rise after four-day drop

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U.S. retail sales and Netflix ( NFLX ) and GE results due later

By Marc Jones

LONDON, July 17 (Reuters) - A healthy crop of earnings

helped European stocks bust out of a four-day losing streak on

Thursday, while the dollar made gains after U.S. President

Donald Trump quashed fresh speculation that he was about to fire

Fed head Jerome Powell.

Europe's STOXX 600 made a solid start as record

orders at Swiss engineering giant ABB and record $13.5 billion

profits at Taiwanese chip giant TSMC came along rising optimism

about a EU-US trade deal after talks were held in Washington.

Traders were awaiting U.S. retail sales and jobless claims

data too which will give a little more insight on how tariffs

are impacting the economy, and digesting the European

Commission's proposal for a major increase in its budget.

It was the currency market moves that remained the immediate

focus however.

The dollar was up 0.4% at $1.16 against the euro,

bringing it largely back to where it had been before what

Societe Generale's Kit Juckes described as Wednesday's "madness"

triggered by reports Trump was readying to oust the Fed chief -

which he later scotched.

Japan's yen gave the greenback further help as polls showing

Prime Minister Shigeru Ishiba's coalition was in danger of

losing its majority in the upper house in upcoming elections

pushed it towards its lowest since April at 148.73 to the

dollar.

Data had also shown the Asian nation's exports were starting

to feel the impact of tariffs with shipments down for a second

straight month, while Australia's dollar had taken a 1%

overnight tumble after weak employment numbers there.

"The market has got itself solidly short on the dollar and

we are going into high summer so people are starting to buy it

back a bit," Juckes said.

WATCHING NETFLIX ( NFLX )

Earnings due later from streaming giant Netflix ( NFLX ),

industrial heavyweight General Electric ( GE ) and drinks firm

PepsiCo ( PEP ) were also on investors' radar.

With Netflix ( NFLX ) having outperformed the S&P 500 year-to-date by

a sizeable 33 percentage points and analysts still bullish the

firm "will need to blow the lights out with a solid beat and

raise," Chris Weston, head of research at broker Pepperstone

said.

Wall Street futures were pointing to

fractionally higher start later.

European stocks were up a comfortable 0.7% after its

four-day run of fall while Japan's Nikkei and bluechip

markets in Taiwan and China had all notched

0.3%-0.6% rises overnight.

Ending what would have been the biggest foreign takeover of

a Japanese company, Canadian retailer Alimentation Couche-Tard ( ANCTF )

withdrew its $47 billion takeover bid for Seven & i

Holdings ( SVNDF ), citing a lack of constructive engagement by

the operator of 7-Eleven convenience stores.

Shares of Seven & i Holdings ( SVNDF ) slid to a three-month

low and ended down over 9%.

Trump's quick denial of the Powell speculation had helped

restore some calm to volatile markets, but he kept the door open

to the possibility of ousting him and renewed his criticism of

the central bank chief for not cutting U.S. interest rates.

"After yesterday's scare, markets have probably built even

more resistance to headlines on this topic" ING analyst

Francesco Pesole said. But, "in that hour, we saw the reaction

we would have expected: a steepening in the U.S. yield curve,

and the dollar sharply lower."

Shorter-term Treasury yields had fallen due to the

expectations that any Powell replacement would be an ultra-dove

and lead to quicker and deeper rate cuts.

The benchmark 10-year Treasury yield was little

changed at 4.4714% in European trading on Thursday, while German

Bund yields were a steady 2.695%, having touched

their highest since late March earlier this week.

In the commodity markets, Brent oil prices rose as

much as 0.4% to $68.78 a barrel and safe-haven metal gold

slipped 0.5% to $3,331 an ounce.