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FOREX-Weak data pulls euro to more than 2-year lows

Published 2019/09/27, 12:52
Updated 2019/09/27, 13:01
© Reuters.  FOREX-Weak data pulls euro to more than 2-year lows
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* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Saikat Chatterjee

LONDON, Sept 27 (Reuters) - The euro was pinned at more than two-year lows on Friday as a steady drip of negative economic data this week sapped investor demand for the single currency while the dollar benefited from some quarter-end rebalancing flows.

Dismal business activity data from the euro area, especially powerhouse economy Germany at the start of the week, has pushed European bond yields lower across the board this week with concerns about a weak economy in Britain also weighing. GVD/EUR

"We have had a steady drip of weak data from the eurozone this week and that is highlighting the differences between the U.S. and Europe where the former is still showing signs of strength," said Thu Lan Nguyen, an analyst at Commerzbank (DE:CBKG).

Against the greenback EUR=EBS , the dollar held firm at $1.0927, just above a May 2017 low of $1.0904.

Versus a basket of its rivals .DXY , the greenback pushed 0.1% higher to 99.21, its highest in more than three weeks.

U.S. data might give a further boost to the broadly firm dollar with personal income and consumption data due later in the trading day. Both indicators are expected to show improved readings, signaling an economy broadly impervious to global trade tensions.

Strong data in the United States has pushed an economic surprise data index published by Citigroup (NYSE:C) .CESIUSD to its highest since February 2018.

In comparison, a similar index on Europe .CESIEUR has fallen dramatically in recent days, signaling slowing economic activity.

Sterling GBP=D3 was the other big loser in London trading after Bank of England policymaker Michael Saunders hinted at looser monetary policy if Brexit uncertainty remained prolonged against a backdrop of disappointing global growth.

The pound weakened 0.3% to a new two-week low of $1.2285 on Friday as his comments raised expectations that the next move from the central bank could be a rate cut. are also digesting the impeachment probe launched into U.S. President Donald Trump and the latest headlines from the trade dispute between the United States and China.

A whistleblower report released on Thursday said Trump not only abused his office in attempting to solicit Ukraine's interference in the 2020 U.S. election, but the White House tried to "lock down" evidence about it. top diplomat said Beijing was willing to buy more U.S. products. CNBC reported that trade war talks were on track and scheduled for Oct. 10-11 in Washington, citing people familiar with the arrangements. the dollar eased against the trade-sensitive Australian AUD=D3 and New Zealand dollars NZD=D3 , which gently rallied on hopes that next month's U.S.-China trade talks will bring progress. Moves were slight, though, and neither strayed far from two-week troughs against the greenback.

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