September 24, 2019 / 7:54 AM / a month ago

FOREX-Euro fragile before German data; UK court ruling in focus

* Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh

By Saikat Chatterjee

LONDON, Sept 24 (Reuters) - The euro nursed losses below the $1.10 line on Tuesday after weak eurozone survey data the day before raised concerns the economy was struggling to gain traction despite another dose of stimulus by the European Central Bank earlier this month.

But with net positions broadly bearish on the single currency, traders are wary of selling the euro aggressively before German IFO data that will provide more clues on how well Europe’s economic powerhouse is coping with the economic slowdown.

“The hope of a stabilisation has been squashed for now and as a result fears of a recession are rising,” Ulrich Leuchtmann, head of FX and commodity research at Commerzbank AG, said.

Against the dollar, the single currency drifted lower to $1.09984 and not far away from a September low of $1.0926 hit on Sept. 3

IHS Markit’s Euro Zone Composite Flash Purchasing Managers’ Index (PMI), sank to 50.4 in September from 51.9 in August and was below all forecasts in a Reuters poll that had predicted a reading of 51.9.

Monday’s downbeat survey results come less than two weeks after the ECB pledged indefinite stimulus to revive the 19-country currency bloc’s ailing economy.

Though employment data in the U.S. services sector also painted a slowing picture of the world’s biggest economy, the underperformance of the European economy relative to its U.S. counterpart, according to the Citigroup’ economic surprise index, increased.

The dollar rose slightly against the yen to 107.59 and inched higher against a basket of currencies to 98.664.

Sterling was also under the gun, wallowing at $1.2429, near a one-week low, ahead of a UK Supreme Court ruling related to the suspension of Britain’s parliament due around 0930 GMT.

The court will rule on whether Prime Minister Boris Johnson acted unlawfully when he suspended parliament just weeks before Brexit, with the case’s outcome potentially complicating his plans to lead his country out of the European Union next month.

Reporting by Saikat Chatterjee; Additional reporting by Tom Westbrook in SINGAPORE; Editing by Jacqueline Wong

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