FOREX-Dollar drops after Fed rate cut, European data beat forecasts

* Market participants see further U.S. rate cuts possible
* Euro zone economic growth steady over past quarter
* U.S. consumer spending rose in September

(New throughout, updates prices, market activity and comments
to U.S. market open, new byline, changes dateline, previous
LONDON)
By Karen Brettell
NEW YORK, Oct 31 (Reuters) - The dollar fell to a 10-day low
against a basket of major currencies on Thursday as investors
evaluated whether the Federal Reserve would continue to cut
rates, and after European data beat expectations.
The Fed on Wednesday lowered its policy rate by a quarter of
a percentage point to a target range of 1.50% to 1.75%.
It also dropped a previous reference in its policy statement
that it would "act as appropriate" to sustain the economic
expansion - language that was considered a sign of future rate
cuts. Market participants remain concerned about a slowdown in the
U.S. economy as the trade war between the United States and
China continues, however, which could force the Fed's hand.
"The new, slightly shorter, statement tries to keep their
options open and puts them back into a data-dependent mode, but
circumstances could mean that they have less optionality than
they think," said Tim Foster, portfolio manager at Fidelity
International in London.
The dollar index .DXY dropped as low as 97.22, the lowest
since Oct. 21, before retracing to 97.38, down 0.27% on the day.
It rose as high as 98.00 on Wednesday following the Fed
decision, its highest since Oct. 17.
Speculators have been cutting their long dollar bets as the
U.S. currency holds near historically high levels. Any
improvement in global data is considered likely to weigh on the
dollar as investors bet on improving growth in Europe and other
regions. IMM/FX
There is a view "that the dollar is expensive and as the
global economy might be able to rebound next year, then the bias
is to sell the dollar," said Vassili Serebriakov, an FX
strategist at UBS in New York.
Data released on Thursday showed that euro zone economic
growth was unchanged in the third quarter, beating market
expectations that it would slow. In the United States, consumer spending rose in September
while wages were unchanged, which could cast doubt on whether
consumers would continue to drive the economy. data for October released on Friday are the next major
U.S. economic focus.
The Japanese yen gained to a two-week high as optimism that
the United States and China would reach a trade deal faded.
Chinese officials have doubts about whether they can reach a
comprehensive long-term trade agreement with Washington and U.S.
President Donald Trump, Bloomberg reported on Thursday, citing
unnamed sources. Currency bid prices at 9:34AM (1334 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1144 $1.1148 -0.04% -2.83% +1.1174 +1.1145
Dollar/Yen JPY= 108.2800 108.8300 -0.51% -1.80% +108.8900 +108.1100
Euro/Yen EURJPY= 120.72 121.36 -0.53% -4.36% +121.4600 +120.5600
Dollar/Swiss CHF= 0.9875 0.9892 -0.17% +0.62% +0.9895 +0.9862
Sterling/Dollar GBP= 1.2952 1.2901 +0.40% +1.53% +1.2975 +1.2895
Dollar/Canadian CAD= 1.3157 1.3156 +0.01% -3.52% +1.3178 +1.3148
Australian/Doll AUD= 0.6908 0.6902 +0.09% -2.00% +0.6929 +0.6889
ar
Euro/Swiss EURCHF= 1.1008 1.1030 -0.20% -2.19% +1.1036 +1.1006
Euro/Sterling EURGBP= 0.8603 0.8641 -0.44% -4.24% +0.8647 +0.8602
NZ NZD= 0.6425 0.6387 +0.59% -4.35% +0.6432 +0.6386
Dollar/Dollar
Dollar/Norway NOK= 9.1891 9.1813 +0.08% +6.37% +9.2212 +9.1586
Euro/Norway EURNOK= 10.2425 10.2350 +0.07% +3.40% +10.2815 +10.2270
Dollar/Sweden SEK= 9.6402 9.6517 -0.14% +7.55% +9.6670 +9.6203
Euro/Sweden EURSEK= 10.7449 10.7605 -0.14% +4.69% +10.7841 +10.7430