FOREX-Dollar falls after U.S. retail sales miss forecasts
* Nikkei newspaper says Obama to name Summers next Fed chief soon
* Markets focused on next week's Fed meeting
* U.S. retail sales disappoint
NEW YORK, Sept 13 (Reuters) - The dollar fell on Friday against the euro and yen, reversing earlier gains, after U.S. retail sales rose less than expected in August in the latest sign that economic growth slowed in the third quarter.
Retail sales increased 0.2 percent last month as Americans bought automobiles, furniture, electronics and appliances, the Commerce Department said on Friday. Analysts had been expecting a 0.4 percent rise for the month.
The report is one of the last before the Fed meets next week, when more clarity on its 'tapering' plans is expected.
Earlier the dollar was higher after a Japanese newspaper reported former Treasury Secretary Lawrence Summers would soon be named to head the Federal Reserve. The White House said U.S. President Barack Obama had yet to make a decision on the Fed nomination.
"It's a little piece of data that says maybe we are not ready to start slowing (asset) purchases and that's bad for the dollar," said Andrew Dilz, foreign currency trader at Tempus Inc in Washington of the retail sales report.
The dollar was last at 81.484, down from Thursday's close of 81.507, though off the two-week low of 81.356 set on Thursday.
The euro was up 0.1 percent at $1.3304.
Separately, the Labor Department reported U.S. producer prices rose in August as energy costs rebounded, but underlying inflation remained tame..
Earlier trading in thin volume was influenced by a report from Japanese business daily Nikkei saying the White House was expected to announce the Fed Chairman decision after the Fed's Sept. 17-18 meeting, at which it is expected to trim its bond buying.
Summers is seen as less dovish than Janet Yellen, the other leading candidate to replace Ben Bernanke, whose term ends next January.
Traders said, although some doubted the credibility of the source, the report gave the dollar and U.S. Treasury yields an added lift.
"The dollar will appreciate in the medium term irrespective of whether its Summers or Yellen," said Ken Dickson, investment director of currencies at Standard Life Investments in Edinburgh with $271.2 billion in assets under management. "It's fair to say the market believe Summers will be more dollar positive."
Investors now turn almost all their focus to next week's Fed meeting.
Following last Friday's weaker than expected U.S. non-farm payrolls data, many traders and analysts expect the central bank to announce a modest $10 billion reduction to its $85 billion monthly bond-buying program.
"Fed tapering is expected next week but the amount they are expected to reduce has been decreasing and this has weighed on the dollar," said Lutz Karpowitz, currency analyst at Commerzbank in London.
The dollar was last down 0.1 percent at 99.45 yen, off an intraday high of 99.97 yen hit after the Nikkei report.
Earlier, the dollar rose against the yen after the government raised its view on the economy for the seventh time this year because of rising capital expenditure.
"In my view, anything that seems to edge away from deflation pressures is more negative for the yen," said Mitul Kotecha, head of global foreign exchange strategy for Credit Agricole in Hong Kong.
Analysts said, although the dollar has recently struggled to stay above 100 yen the uptrend was still intact.