FOREX-Dollar gains before manufacturing data, euro crumbles on German inflation

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Dollar gains against major currencies
* Weak German data hits euro
* RBA big event risk in Asian trading

By Stanley White
TOKYO, Oct 1 (Reuters) - The U.S. dollar traded near its
highest in almost two weeks versus the yen before the release of
data that is forecast to show the U.S. manufacturing sector
returned to growth, which would ease concern about the impact of
the ongoing Sino-U.S. trade war.
The euro teetered near its lowest in more than two years
versus the greenback as weak economic data from Germany
reinforced expectations that monetary policy in the euro zone
will remain accommodative for an extended period.
The Australian dollar edged lower before an expected
interest rate cut from the Reserve Bank of Australia (RBA) later
on Tuesday.
A host of economic data and comments from central bankers
this week will set the tone for major currencies as traders try
to determine how far policymakers go to bolster growth.
"Economic data can be supportive of the dollar, and the
Federal Reserve's comments are not as dovish as some people
think," said Masafumi Yamamoto, chief currency strategist at
Mizuho Securities in Tokyo.
"An RBA rate cut and the risk of a stagnant European economy
both should be positive for the greenback."
The dollar traded at 107.85 yen JPY=EBS early in Asia,
close to its strongest level in almost two weeks.
The yen remained weak after the Bank of Japan's tankan
showed business confidence in the third quarter slid to its
lowest in six years. Trading could be subdued in Asian time because China's
financial markets are closed until Monday for public holidays.
The dollar index .DXY against a basket of six major
currencies rose 0.03% to 99.402, approaching the highest in more
than two years.
The Institute for Supply Management's measure of U.S.
manufacturing activity due later on Tuesday is forecast to show
a return to expansion in September, but just barely.
In August U.S. manufacturing activity contracted for the
first time in three years due to the U.S.-China trade war.
Several Fed policymakers are scheduled to speak this week,
but traders said they will focus most on comments from Fed
Chairman Jerome Powell on Friday for hints about the direction
of U.S. monetary policy.
The Fed has cut interest rates twice this year, but there
are signs that the Fed is reluctant to ease policy further
because the jobs market remains strong.
The euro stood at $1.0900 EUR=EBS in Asia, nursing a 0.4%
decline in the previous session when it slid to $1.0885, which
is the lowest since May 12, 2017.
Annual inflation in Germany, Europe's largest economy,
slowed to the lowest in almost three years, data on Monday
showed. The European Central Bank unleashed a new round of monetary
easing measures on Sept. 12, but there is growing concern that
the central bank is reaching the limits of what it can achieve
and the burden will fall to eurozone governments to boost fiscal
spending.
The Australian dollar fetched $0.6751 AUD=D3 , down 0.02%
in early trade.
Australia's central bank is all but certain to cut its cash
rate to a record low of 0.75% on Tuesday and will likely ease
again in early 2020 to boost inflation and support a stuttering
economy, a Reuters poll showed. The New Zealand dollar traded at $0.6264 NZD=D3 , which is
within striking distance of a four-year low. The kiwi has taken
a hit as weakening business confidence bolstered expectations
for monetary easing.

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Japan big manufacturers' mood worsens - BOJ tankan
inflation slows unexpectedly in September c.bank seen easing policy in Oct, rates seen at
0.5% by early 2020 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>