FOREX-Euro at 1-week lows as expectations of more policy easing grows

* Euro one of worst performing currencies this week
* Sterling slips to new 27-month low vs dollar
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Olga Cotaga
LONDON, July 17 (Reuters) - The euro fell to a one-week low
against the dollar on Wednesday towards the lower end of this
year's range, weighed down by expectations of monetary policy
easing and investors' preference for the greenback.
Analysts say it is unlikely it will recover in the
short-term before a European Central Bank meeting next week
where policymakers might unveil plans for fresh monetary
stimulus.
Nearly two interest rate cuts of 10 basis points are priced
in by money markets in 2019 and a worse-than-expected ZEW survey
of German economic sentiment this week put further pressure on
the struggling euro, one of the worst performing currencies this
week, along with sterling.
The common currency was steady at $1.1212 EUR=EBS but it
dropped earlier to $1.1200, the lowest since July 9. It has
fallen by 2.2% so far this year against the dollar as it traded
between $1.15 and $1.11.
As the European Central Bank meeting on July 25 approaches,
the euro is likely to continue trading around current levels and
possibly below $1.12, said Kenneth Broux, head of corporate
research at Societe Generale.
Europe is underperforming and "I would favour long dollar in
this environment," he said.
The pound slipped to another 27-month low of $1.2382
GBP=D3 on a combination of no-deal Brexit jitters and a
broad-based stronger dollar. It also hit a fresh six-month low
against the euro at 90.51 pence EURGBP=D3 . GBP/
The dollar rose on Tuesday after stronger-than-expected June
U.S. retail sales data dampened expectations that the Fed could
cut interest rates by 50 basis points (bps) rather than 25 bps
at its month-end policy review.
An index which tracks the dollar against a basket of six
major currencies .DXY surged to a one-week high of 97.44
earlier, but it retreated back slightly and was last flat at
97.37.
The United States still has a long way to go to conclude a
trade deal with China but could impose tariffs on an additional
$325 billion worth of Chinese goods if it needed, Trump said.
But the impact of Trump's comments on other major
currencies was limited.
"The U.S.-China trade row is not at the centre of the
market's attention right now. Focus is on the Fed's policy, U.S.
data and their impact on yields," Junichi Ishikawa at IG
Securities said.