FOREX-Bullish data comforts dollar, euro eyes Greece

* Dollar index modestly higher following strong U.S. data

* Retail sales up 1.2 pct in May, control group sales up 0.7 pct

* Greek debt talks suffer big setback as IMF walks away

* Week's end highlights contrasting fortunes of antipodeans (Adds details, quotes)

By Ian Chua and Shinichi Saoshiro

SYDNEY/TOKYO, June 12 (Reuters) - The dollar clung to modest gains early on Friday, having drifted higher on fresh evidence that the U.S. economy was gaining momentum, while the euro was on the defensive after the IMF pulled out of debt talks with Greece.

The dollar index last traded at 95.004, recovering from a near one-month low of 94.322 set on Wednesday.

Dollar bulls took some heart after retail sales rose sharply in May, adding to recent upbeat employment data that suggested the economy was warming up after a chilly start to the year.

If the momentum is sustained, the Federal Reserve could begin to hike interest rates later in the year, a scenario still favoured by many economists.

Yet the dollar's reaction was limited at best, partly held back by a fall in U.S. Treasury yields and caution ahead of the June 16-17 Federal Open Market Committee (FOMC) meeting. Fed funds futures also barely reacted to the bullish retail sales data.

"With Q2 having been a difficult quarter for many market participants and the FOMC meeting looming next week, there may be some reluctance to rebuild long positions in the USD or short positions in front-end rates," analysts at BNP Paribas (Xetra: 887771 - news) wrote in a note to clients.

Against the yen, the greenback bought 123.48 yen, well off this week's trough of 122.46, but also some distance from a 13-year high of 125.86 struck last Friday on robust U.S. non-farm payrolls data.

"The dollar will have a hard time retesting highs before next week's Fed meeting. Amid an absence of immediate fundamental factors -which the Fed meeting will provide- the pair is trading on technical factors and likely to be stuck in the 122-125 yen range," said Junichi Ishikawa, market analyst at IG Securities in Tokyo.

News (Other OTC: NWSAL - news) the International Monetary Fund (IMF) has pulled out of debt talks with Greece due to major differences appeared to have spurred some safety bids for Treasuries.

The move piles pressure on Greece to come to an agreement before the end of the month when it is otherwise set to default on a 1.6 billion euro ($1.8 billion) repayment to the IMF.

Against this backdrop, the euro sagged to $1.1261, retreating from a high of $1.1387 set on Wednesday. It fell as far as $1.1181 overnight, but managed to reverse half of its losses.

"Financial markets are tiring of Greece, but until we get any clarity on what happens next, it will remain a niggle factor," analysts at ANZ said.

In a week of contrasting fortunes for the antipodean currencies, the Australian dollar was poised to gain 1.5 percent on the week as chances for an interest rate cut there receded, while its New Zealand counterpart was on track for a 0.4 percent weekly loss after a rate cut by its Reserve Bank.

The Aussie was little changed at $0.7746 while the kiwi fetched $0.7017, within striking distance of a five-year trough of $0.6966 hit overnight. (Editing by Simon Cameron-Moore)