FOREX-Euro falls to two-months low as COVID-19 angst boosts dollar

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
* French business activity unexpectedly slows
* German recovery slower than expected
* Dollar holds gains against
* Response to second wave of virus rattles investors

By Julien Ponthus
TOKYO, Sept 23 (Reuters) - The euro fell to a two-month low
on Wednesday as positive U.S. economic data and concern about a
second wave of coronavirus infections met tepid European
indicators and pushed the U.S. dollar higher.
The dollar edged up to $1.1671 per euro EUR=D3 , its
highest since July 27, after data showed Germany's private
sector has recovered less than expected in September amid
weakness in domestically driven services. German consumer morale
also improved less than expected, a survey showed.
An earlier report showed French business activity slowed to
a four-month low in September, with services weaker than
expected, as France struggled to contain a surge in new COVID-19
cases.
Traders in the pound and the euro are also worried that
Britain and the European Union will fail to agree a free trade
deal, which would cause additional economic strain.
"At present the market is once again dominated by concerns
about a second wave of infections, above all in Europe, meaning
that the dollar is in demand again", Commerzbank analysts wrote
in a morning note.
The dollar is likely to continue to gain as the coronavirus
rattles sentiment in Europe, but uncertainty about this year's
U.S. presidential election means it could be prone to more
volatile swings.
The pound GBP=D3 fell to $1.2692, its lowest since late
July, after British Prime Minister Boris Johnson introduced on
Tuesday new restrictions on business activity to combat a second
wave of the coronavirus. The dollar was stable against the Swiss franc CHF=EBS at
0.9201 after a 0.6% gain from Tuesday when the greenback was
bolstered by data showing U.S. home sales surged to their
highest level in nearly 14 years in August.
The dollar index =USD , which pits the dollar against a
basket of six major currencies, rose to a high of 94.25 on
Wednesday, the highest in two months.
The Australian dollar AUD=D3 fell to a six-week low of
$0.7116. The New Zealand dollar NZD=D3 lost 0.56% to $0.6597.
The Reserve Bank of New Zealand held its policy rate at
0.25% but warned of job losses and business closures, which
reinforced expectations it would move to negative interest rates
in coming months.