* U.S. retail sales and jobless claims data disappoints
* Upside surprise in German, French GDP buoys euro
* Euro zone economy shrinks just 0.1 pct in 2nd quarter (Adds comment, details, updates prices)
By Nick Olivari
NEW YORK, Aug 13 (Reuters) - The euro reached a one-week high against the dollar on Thursday after the euro zone's two biggest economies posted surprise returns to growth in the second quarter.
The European reports contrasted with the United States, where disappointing retail sales cast a shadow over an anticipated rebound in consumer spending in the third quarter. A separate report showing the number of jobless U.S. workers filing jobless claims rose unexpectedly last week further weighed on the dollar.
The U.S. data came a day after the Federal Reserve gave its clearest statement so far that it saw the U.S. recession nearing an end.
"The euro is advancing against the dollar this morning, having received a shot in the arm from stronger-than-expected euro-zone second-quarter GDP data," said Vassili Serebriakov, currency strategist at Wells Fargo Bank in New York.
Midway through the New York session, the euro was up 0.5 percent on the day at $1.4275, after rising as high as 1.4321, its highest in a week, according to Reuters data. Against the yen, the euro fell 0.1 percent to 136.14 yen.
The dollar fell 0.7 percent versus the yen to 95.37, giving up all gains on the day after the U.S. data. The dollar index, which measures the dollar against a basket of currencies, fell 0.5 percent to 78.436, near a week-long low of 78.235 touched earlier in the session.
Both the German and French economies expanded 0.3 percent in the April-to-June quarter, compared with expectations for further contraction. Other data showed the entire 16-nation euro bloc posted a modest 0.1 percent contraction.
The euro climbed after the data, but analysts said markets were brushing off some of the less rosy readings on gross domestic product. Despite the slight quarterly contraction, the euro zone economy shrank 4.6 percent from a year ago.
The U.S. Commerce Department said total retail sales edged down 0.1 percent in July after increasing a revised 0.8 percent in June. Sales in June were initially reported to have risen 0.6 percent.
Analysts polled by Reuters had forecast retail sales would rise 0.7 percent in July, on an expected boost from the government's "cash for clunkers" program that gives consumers money to swap aging gas-guzzlers for new, more fuel efficient models.
"The decline in the headline number for retail sales, despite much talk of the 'cash for clunkers' program, came as a big disappointment," said Matthew Strauss, senior currency strategist at RBC Capital Markets in Toronto. "I'm not surprised to see the dollar giving up its earlier gains versus the yen as investors are flocking to the Japanese currency as a safe haven."
Initial claims for state unemployment insurance benefits climbed 4,000 to a seasonally adjusted 558,000 in the week ended Aug. 8 from 554,000 the prior week, the Labor Department said.
Higher-yielding currencies such as the Australian and New Zealand dollars gained more than 1 percent each, extending gains made the previous day.
MONETARY POLICY IN FOCUS
Sterling rose 0.6 percent to $1.6575, recovering from a two-week low touched on Wednesday, when the government reported the UK jobless rate hit a three-year high and the Bank of England's inflation report suggested that markets were expecting rates to rise too early.
The Fed held its benchmark rate near zero on Wednesday and said it would likely stay there for an extended period to guide the way to recovery. It also said the economy was showing signs of leveling out, which boosted risk sentiment.
Still, a degree of caution remained over the Fed's move to extend the time frame of asset purchases as it indicated the economy was still vulnerable, analysts said.
"The problem with Fed statement is that the market can read into it what it wants, leaving both sides content. ... Hence, for now it is still unclear which way the USD will jump," said Stuart Bennett, senior FX strategist at Calyon in London. (Additional reporting by Vivianne Rodrigues in New York and Naomi Tajitsu in London; Editing by Leslie Adler)