GLOBAL MARKETS-Dollar weakens on Brexit, shares sapped by weaker China growth

(Adds close of U.S. markets)
* China data, investor caution before Brexit vote, hit
markets
* China GDP grows 6.0% in third quarter, near three-decade
low
* Dollar posts worst week in almost four months ahead of
vote
* Euro at near two-month high, sterling at five-month high

By Herbert Lash
NEW YORK, Oct 18 (Reuters) - The dollar posted its worst
week in almost four months on Friday, pummelled by sterling and
euro rallies driven by a deal on Britain's departure from the
European Union, while China's weakest growth in nearly three
decades weighed on equities.
The dollar crept lower against the euro as the common
currency enjoyed a lift from hopes a Brexit deal could improve
the odds of the euro zone avoiding a recession.
Dismal manufacturing data and worries the U.S.-China trade
war could slow euro zone economies even further have rattled the
euro this year, while fears of a disorderly Brexit had slammed
sterling until a week ago.
"We can easily tell what's driving the euro, and that's a
potential Brexit deal. We're going to find out this weekend
whether this is going to turn into a realty or whether it's a
pipe-dream," said Paul Mendelsohn, chief investment strategist
at Windham Financial Services in Charlotte, Vermont.
The euro EUR= rose 0.36% to an almost two-month high of
$1.1162. Sterling GBP= climbed 0.42% to a fresh five-month
high of $1.2942.
British Prime Minister Boris Johnson confounded his
opponents on Thursday by clinching a new deal with the EU, even
though the bloc had promised it would never reopen a treaty
agreed on last year. Parliament will vote Saturday on a deal that could lead
shares in British-oriented businesses, such as housebuilders and
retailers, to rocket to record highs if approved. Investors also
predict the pound could rally about 5%. Michael Hewson, chief market analyst at CMC Markets in
London, said however members of parliament cast their vote, the
Brexit saga is unlikely to be over.
"If MPs do hold their noses and vote for the deal, at least
we can move on to phase 2 which is negotiating the new
relationship over the next 14-month transition period," he said.
Gloomy earnings reports from French carmaker Renault and
food group Danone drove European shares lower while negative
headlines about Johnson & Johnson and Boeing on Wall Street
offset generally positive U.S. corporate earnings.
MSCI's gauge of stocks across the globe .MIWD00000PUS shed
0.24% while the FTSEurofirst 300 index .FTEU3 of leading
European shares closed down 0.38%.
Bleak Chinese economic data also soured risk appetite, with
the Shanghai Shenzhen index .CSI300 falling 1.2%.
Asian stocks stumbled after China's third-quarter growth
slowed more than expected to its weakest pace in almost three
decades as the bruising U.S. trade war hit factory output. Gross
domestic product (GDP) rose 6.0% year-on-year. Wall Street also edged lower on worries about the global
economy following China's GDP data and J&J after it moved to
recall a batch of baby powder.
J&J shares fell 6.2% while Boeing slid 6.79% after it turned
over messages from 2016 between two employees that suggest the
airplane maker may have misled U.S. aviation officials about a
key safety system on the grounded 737 MAX. Robust earnings from Coca-Cola Co KO.N and Schlumberger NV
SLB.N , among others, helped mitigate the losses. Coke rose
1.84% and Schlumberger added 1.32%.
The Dow Jones Industrial Average .DJI fell 255.68 points,
or 0.95%, to 26,770.2. The S&P 500 .SPX lost 11.75 points, or
0.39%, to 2,986.2 and the Nasdaq Composite .IXIC dropped 67.31
points, or 0.83%, to 8,089.54.
Euro zone bond yields rose a day before the Brexit vote.
Yields have generally pushed higher since Irish and British
leaders said a week ago they saw a path to a deal, boosting risk
appetite and eroding demand for safe-haven assets such as bonds.
Germany's 10-year Bund yield was at -0.39% DE10YT=RR ,
after touching its highest since late July on Thursday.
U.S. Treasury yields fell as investors awaited Saturday's
Brexit vote, with the benchmark 10-year U.S. Treasury note
US10YT=RR up 1/32 in price to push yields down to 1.7501%.
Oil prices edged lower as concerns about China's economy
outweighed bullish signals from its refining sector.
Benchmark Brent crude oil futures LCOc1 settled down 49
cents to $59.42 a barrel. U.S. West Texas Intermediate (WTI)
crude CLc1 futures fell 15 cents to settle at $53.78 a barrel.
Gold steadied, helped by a weaker dollar. U.S. gold futures
GCv1 settled 0.3% lower at $1,494.10 an ounce.

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GBP loses Brexit deal boost https://tmsnrt.rs/2MtqzNH
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