September 30, 2019 / 1:58 PM / 17 days ago

FOREX-Euro drops to 28 month low on growth concerns

    * German inflation slowed in September
    * Seasonal demand boosts greenback
    * U.S.-China trade talks in focus 

 (New throughout, updates trading and comments to U.S. market
open, new byline, changes dateline, previous LONDON)
    By Karen Brettell
    NEW YORK, Sept 30 (Reuters) - The euro fell to its lowest in
two-and-a-half years against the U.S. dollar on Monday as
concerns about euro zone growth weighed on the single currency,
while the greenback benefited from seasonal demand and
uncertainty arising from the U.S.-China trade war.
    German annual inflation unexpectedly slowed for the third
consecutive month in September, data showed on Monday.

    “The German CPI print this morning was a little bit on the
disappointing side,” said Bipan Rai, North American head of FX
strategy at CIBC Capital Markets in Toronto.
    Germany's leading economic institutes have also revised down
their growth forecast for Europe's biggest economy for this
year, two sources with knowledge of their decision told Reuters
on Monday.
    The revisions, which feed into the government's own output
projections, reflect growing concerns that a slowdown in Germany
driven by a recession in the export-dependent manufacturing
sector could hamper the broader euro zone economy.
    Demand for dollars heading into the last quarter of the year
is also boosting the greenback.
    “In Q4 we tend to see strong seasonal demand for the U.S.
dollar, and given the fact that euro/dollar is the most
frequently traded pair in the foreign exchange market, that
certainly means that we could be seeing some further downside in
the euro going forward,” Rai said.
    The euro was last down 0.37% at $1.0898, after earlier
falling to $1.0883, the lowest since May 2017.
    Investors are also focused on the U.S.-China trade war,
which is being blamed for slowing global growth.
    President Donald Trump's administration is considering
delisting Chinese companies from U.S. stock exchanges, three
sources briefed on the matter said on Friday, in what would be a
radical escalation of U.S.-China trade tensions.
    China warned on Monday of instability in international
markets from any "decoupling" of China and the United States.

    Washington and China are preparing for another round of
trade talks scheduled for Oct. 10 and 11.
    Uncertainty around the outcome of an impeachment inquiry
into Trump may also provide safe-haven demand for the greenback.
    Trump on Monday escalated his attacks against the lawmaker
leading the impeachment inquiry against him, suggesting that
Representative Adam Schiff be arrested for "treason."

    New Zealand's dollar dropped as low as $0.6247, its
weakest since 2015, after a survey showed business sentiment
weakening to an 11-1/2 year low in September, strengthening the
case for a reduction in interest rates.
    Currency bid prices at 9:42AM (1342 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.0898        $1.0938     -0.37%         -4.98%      +1.0947     +1.0886
 Dollar/Yen       JPY=        108.0200       107.9200    +0.09%         -2.03%      +108.0900   +107.7500
 Euro/Yen         EURJPY=     117.74         118.07      -0.28%         -6.72%      +118.1800   +117.5500
 Dollar/Swiss     CHF=        0.9967         0.9907      +0.61%         +1.56%      +0.9974     +0.9905
 Sterling/Dollar  GBP=        1.2307         1.2288      +0.15%         -3.53%      +1.2330     +1.2284
 Dollar/Canadian  CAD=        1.3248         1.3244      +0.03%         -2.85%      +1.3259     +1.3225
 Australian/Doll  AUD=        0.6757         0.6765      -0.12%         -4.14%      +0.6769     +0.6746
 Euro/Swiss       EURCHF=     1.0863         1.0842      +0.19%         -3.47%      +1.0873     +1.0836
 Euro/Sterling    EURGBP=     0.8853         0.8897      -0.49%         -1.46%      +0.8905     +0.8850
 NZ               NZD=        0.6268         0.6295      -0.43%         -6.68%      +0.6303     +0.6250
 Dollar/Norway    NOK=        9.0822         9.0753      +0.08%         +5.13%      +9.0968     +9.0697
 Euro/Norway      EURNOK=     9.8991         9.9286      -0.30%         -0.07%      +9.9450     +9.8965
 Dollar/Sweden    SEK=        9.8188         9.7934      -0.11%         +9.54%      +9.8322     +9.7863
 Euro/Sweden      EURSEK=     10.7040        10.7156     -0.11%         +4.29%      +10.7333    +10.6950

 (Editing by Nick Zieminski)
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