FOREX-Euro at one-month low vs dollar; yuan set for worst month since 1994

* Australian dollar falls towards 10-year low
* New Zealand dollar drops to four-year low
* Sterling stable below $1.22
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Olga Cotaga
Aug 30 (Reuters) - The euro plunged to a one-month low
against the dollar on Friday, as investors looked for aggressive
easing by the European Central Bank and ignored doubts by some
policymakers about the need for more stimulus.
Poor euro zone economic data on Thursday reinforced views
the ECB would cut its benchmark interest rate and announce a new
round of quantitative easing at September's meeting. German
inflation slowed in August and unemployment rose, more evidence
that Europe's largest economy is slowing Christine Lagarde, the ECB's next president, said the
central bank still has room to cut rates if necessary
But divisions clearly remain within the ECB.
Board member Sabine Lautenschlaeger said it was too early to
consider a "huge package" of stimulus. Dutch central bank chief
Klaas Knot, a prominent hawk on the Governing Council, said he
was open to a rate cut but thought a resumption of asset
purchases would be premature. The euro fell 0.2% to $1.1033 EUR=EBS , the lowest since
Aug. 1. It has shed nearly 12% of its value against the dollar
since the beginning of last year in a clear downward trajectory.
An index that tracks the dollar against a basket of six
other currencies was flat at 98.561, down from a one-month high
of 98.595 in Asian trading .DXY . The dollar gained on Thursday
from hopes China and the United States would renew their talks
on trade.
"The dollar is getting bid from month-end flows, but the
euro side of the equation is compromised by what appears to be a
set of lacklustre economic data in the eurozone," said Jeremy
Stretch, head of G10 forex strategy at CIBC Capital Markets.
"This opens a debate of how aggressive the ECB" may be in
the coming months, Stretch said.
Money markets are pricing in 15 basis points of rate cuts at
the next ECB meeting, on Sept. 12, pushing rates further into
negative territory.
Elsewhere, the Australian dollar AUD=D3 headed towards a
recent 10-year low, last trading down 0.2% at $0.6718. The New
Zealand dollar NZD=D3 was down 0.2% at $0.6297, after touching
a four-year low of $0.6290.
Analysts blamed the declines on fading expectations that
Beijing and Washington would avert increases in tariffs on
Chinese goods set for Sept. 1 Washington is due to
start imposing 15% tariffs on $125 billion worth of goods from
China on Sunday.
Focus is also moving to weekend data from China, especially
its official manufacturing survey, which is expected to show
factory activity contracted in August for the fourth straight
month.
The yuan is set for its biggest monthly decline since 1994.
It has lost around 3.7% to the dollar CNH=D3 , after trading as
low as 7.185 earlier this month.
The Japanese yen was stable at 106 versus the dollar
JPY=EBS , though it has gained about 2% this month.
"There are so many geopolitical risk factors now. Not to
mention U.S.-China trade conflicts, we have Brexit, Hong Kong
and the Middle East. So we should expect the yen to jump from
time to time," said Minori Uchida, chief currency analyst at
MUFG Bank.
The pound was steady at $1.2182 GBP=D3 , but 0.2% lower
against the euro at 90.59 pence EURGBP=D3 .


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Euro downward trajectory intensifies further https://tmsnrt.rs/2PpNVr1
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