FOREX-Yen falls as Goldman feeds appetite for higher yield

* Yen, US dollar soften as investors cautiously chase risk

* Goldman earnings top estimates, with more banks on tap

* U.S. data beats expectations but enthusiasm limited

* Dollar extends gains vs yen after Intel's results

(Updates prices. Adds Intel's results)

By Vivianne Rodrigues

NEW YORK, July 14 (Reuters) - The yen fell on Tuesday as earnings of Goldman Sachs surpassed expectations, stoking modest hopes for an economic recovery and boosting investors' appetite for stocks and higher-yielding assets.

But traders were cautious ahead of earnings news from other U.S. banks while lackluster data from Germany weighed on the euro, keeping it rooted in a broad range against the dollar.

The slight rise in risk appetite supported higher-yielding currencies and those tied to commodity prices such as the Canadian dollar , which hit a three-week high earlier against the greenback.

The Japanese yen and the U.S. dollar tend to fall when risk appetite rises as investors target higher-yielding currencies and assets such as stocks and commodities.

A report on Tuesday showed better-than-expected June U.S. retail sales, but traders noted that much of the 0.6 percent rise in retail sales was driven by higher gasoline prices.

"Retail sales were better than expected, so that's a bit of good news, but there has been little follow-through as the market is uncertain which way it wants to trade," said Greg Salvaggio, vice president of trading at Tempus Consulting in Washington.

Salvaggio also said that data showing a sharp rise in U.S. producer prices last month, which pushed government bond yields to rise, may stoke inflation fears.

Other traders noted the thin summer trading conditions, which adds up to a euro stuck in a broad $1.3850-$1.4050 range.

In late afternoon trading in New York, the euro was 0.1 percent lower at $1.3966 and slightly higher against the yen at 130.12 yen .

Against the yen, the dollar was last 0.7 percent higher at 93.65 yen . The greenback extended gains versus the Japanese currency and hit session highs in late trading after U.S. chip maker Intel Corp. second-quarter results beat Wall Street's expectations.

The company also gave a forecast for current-quarter revenue that also topped analysts' estimates.

Earlier, a 33 percent rise in Goldman Sachs' quarterly earnings lifted some spirits, though market participants remained cautious ahead of reports this week from other banks, including Citigroup Inc and JPMorgan Chase & Co .

"The focus will remain for now on corporate earnings, with U.S. equities likely to be the biggest factor weighing on the greenback." said Michael Woolfolk, senior currency strategist at The Bank of New York Mellon.

"If earnings disappoint, as many suspect, the dollar has room to rally on rising risk aversion and falling stock prices," he added. "If earnings exceed expectations, the dollar may come under renewed selling pressure."

HIGH-YIELDERS

Currencies seen as higher risk did better as the Canadian dollar rose more than 1 percent to a three-week high of C$1.1345 per U.S. dollar.

Australia's dollar rose 1.3 percent to $0.7927 , and sterling added 0.5 percent to $1.6311 . Strong Australian business confidence data and better-than-expected UK retail sales and home price data added to demand for both. The euro's woes were tied partly to a monthly poll of economic sentiment from German think-tank ZEW, which defied upbeat market expectations and fell for the first time since October.

The ZEW report "was much lower than what was expected, but it is still a figure that shows more optimism than pessimism toward economic recovery," said Dan Cook, a senior market analyst at IG Markets Inc. in Chicago. Investors' attention now will turn ahead to readings on U.S. consumer prices, industrial output and minutes from the Federal Reserve's last policy meeting all due on Wednesday.

(Additional reporting by Steven C. Johnson)