* Euro falls 0.6%, weaker PMI data hurts sentiment
* Dollar rises, may avoid 9th weekly consecutive loss
* China's yuan hits seven-month high vs dollar
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
(Adds details, latest prices, updates chart)
By Tommy Wilkes
LONDON, Aug 21 (Reuters) - The euro fell on Friday as an
August batch of business surveys pointed to a stuttering
economic recovery, while the U.S. dollar was on track to end
what would be a ninth consecutive weekly decline.
Flash euro zone manufacturing and services purchasing
managers index (PMI) numbers for August were worse than
expected. IHS Markit's flash Composite Purchasing Managers'
Index, seen as a good gauge of economic health, sank to 51.6
from July's final reading of 54.9. The single currency, which had been falling before the
results were released, extended losses and dropped as much as
0.6% to $1.1784 EUR=EBS , a one-week low.
"The latest flash PMI data for August in France and Germany
would appear to point to a plateauing in economic activity,
particularly in the services sector, where rising infection
rates here could well be tempering economic activity on the
margins," said Michael Hewson, analyst at CMC Markets.
The euro, which surged from under $1.12 in early July to a
more than-two-year high of $1.1966 earlier this week, has been
the biggest beneficiary from a dollar whacked recently by
concerns about the United States' economic recovery and
political squabbling over more stimulus.
With its Friday rebound the dollar was on course to escape a
ninth consecutive weekly decline. Should the greenback end the
week down, that would mark the longest losing streak since the
summer of 2010 and a run that has only happened 5 times since
1990.
A larger-than-expected rise in weekly jobless claims in the
United States and warnings from Federal Reserve officials about
a recovery in hiring have raised doubts about how quickly the
world's largest economy will bounce back from the coronavirus.
Those concerns, combined with an excess supply of dollars
already in circulation, are likely to weigh on the greenback in
coming weeks, analysts say.
Republicans and Democrats are struggling to agree on
additional stimulus to boost the economy, in contrast to the
euro zone where investors have welcomed the scale of the
economic packages recently launched.
The dollar index, which measures the greenback against a
basket of rivals, rose as the euro fell and was last at 93.216
=USD , up 0.5%.
Commerzbank currency analyst Ulrich Leuchtmann said that
uncertainty about the dollar was undermining the greenback's
safe-haven credentials.
"Everything all told: as long as the market considers the
dollar to be excessively high risk a sustainable U.S. dollar
recovery remains unlikely," he said.
YUAN RALLIES
The standout performer earlier on Friday was China's yuan,
which in offshore markets CNH=EBS briefly hit 6.8935, its
strongest since Jan. 21.
China's currency has recovered all of its losses since the
Chinese city of Wuhan, where the coronavirus initially broke
out, was first put on lockdown, as investors bet on a strong
recovery in the country's economy.
Sterling weakened and was last down 0.6% at $1.3140
GBP=D3 . It was little changed versus the euro at 89.79 pence
EURGBP=D3 .
Currency moves elsewhere were contained. The dollar fell
0.1% versus the Japanese yen to 105.67 JPY=EBS .
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(Editing by Kirsten Donovan and Christina Fincher)