FOREX-Euro on defensive ahead of ECB, yuan slips after RRR cut

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Central banks are easing policy to support growth
* U.S.-China trade war weighs on global economy
* Brexit uncertainty is a risk to sterling

(Adds onshore yuan trade)
By Stanley White
TOKYO, Sept 9 (Reuters) - The euro was under pressure on
Monday ahead of a European Central Bank meeting later this week
at which policymakers are expected to deliver new stimulus to
bolster a flagging regional economy.
Heightened expectations for an ECB easing come as other
global central banks move to loosen the monetary spigot,
including the People's Bank of China, which on Friday cut the
amount of cash that banks must hold as reserves. The yuan weakened on Monday following China's easing and a
surprise decline in exports reported on Sunday. However, in
broader financial markets, global stimulus hopes have helped
lift appetite for riskier assets, such as the Australian and New
Zealand dollars, which held near recent peaks.
The dollar was confined to a narrow range versus the yen as
traders weighed the prospect of U.S. interest rate cuts against
their demand for safe-haven assets.
"The Chinese numbers play to the view that if we don't see
progress in U.S.-China trade talks, then further easing will be
necessary, including tolerance of a weaker yuan," said Ray
Attrill, head of foreign exchange strategy at National Australia
Bank in Sydney.
"The ECB is the big game in town globally this week, and the
market is more comfortable with the Federal Reserve cutting
rates, so I think the market is probably risk neutral."
Sterling edged lower as political uncertainty about how the
UK would complete its divorce with the European Union by an Oct.
31 deadline dented appetite for the pound.
Traders are likely to take their cues from the ECB as major
central banks line up support measures for a weakening global
economy.
The euro was little changed at $1.10295 EUR=EBS early in
Asian trading after falling 0.1% on Friday.
Sterling traded at $1.2276 GBP=D3 , down 0.10% so far on
the day.
The dollar index =USD against a basket of six major
currencies fell 0.04% to 98.423
The dollar traded at 106.91 yen JPY=EBS , little changed
from Friday.
The Australian dollar AUD=D3 , a liquid proxy for risk,
inched up to $0.6859, near a six-week peak of $0.6862. The New
Zealand dollar NZD=D3 was steady at $0.6428, not far from a
three-week high of $0.6444 touched on Friday.
Trading was subdued as one of the strongest typhoons to hit
Tokyo in recent years made landfall early on Monday, cancelling
scores of train lines. The European Central Bank is all but certain to approve new
stimulus measures on Thursday to boost an ailing economy, but
the composition of its package is far from clear as a rift has
opened between hawkish northern European policymakers and doves
from the south. Data due later Monday on German exports could provide
further clues about the health of the global economy.
Policymakers are rushing to bolster growth as a wide-ranging
dispute between the United States and China over trade policy
drags into a second year, increasing the risk of recession.
The onshore yuan CNY=CFXS slipped 0.13% to 7.1242 per
dollar, while the offshore yuan CNH=D3 shed 0.22% to 7.1231
per dollar.
China's central bank said on Friday it was cutting the
amount of cash that banks must hold as reserves for the third
time this year, releasing 900 billion yuan ($126.35 billion) in
liquidity to shore up the flagging economy.
The PBOC has now slashed the ratio seven times since early
2018.
China's exports unexpectedly fell in August as shipments to
the United States slowed sharply, pointing to further weakness
in the world's second-largest economy. The U.S. Federal Reserve will continue to act "as
appropriate" to sustain the economic expansion in the world's
biggest economy, Fed Chair Jerome Powell said Friday in Zurich,
confirming expectations for a rate cut at the Fed's next policy
decision on Sept. 18.