* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Saikat Chatterjee
LONDON, Sept 24 (Reuters) - The euro held below $1.10 on
Tuesday as positive German business morale survey data calmed
sentiment, with large short bets against the single currency
also keeping investors sidelined.
German business morale rose in September for the first time
in six months but Europe's largest economy is still likely
slipping into recession as the U.S.-China trade conflict and
Brexit bite, the Ifo economic institute said. "The data was quite negative but I think the euro has
stabilised for now and we see it heading up to $1.12 versus the
dollar in the coming months," said Manuel Oliveri, an FX
strategist at Credit Agricole in London.
Against the dollar EUR=EBS , the single currency was
broadly steady at $1.0989 and not far from a September low of
$1.0926 hit on Sept. 3.
On Monday, 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. The downbeat survey results come less than two weeks after
the ECB pledged indefinite stimulus to revive the 19-country
currency bloc's ailing economy.
"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.
Fears of an economic slowdown have prompted hedge funds to
ramp up their negative bets against the euro in recent weeks
with overall short bets at their largest in three months,
according to futures data.
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 JPY= to 107.69
and inched higher against a basket of currencies .DXY to
98.664.
Sterling GBP=D3 was trading broadly flat on the day after
surging briefly to a session high of $1.2491 immediately after
the Supreme Court ruled Prime Minister Boris Johnson's decision
to suspend parliament for five weeks was unlawful. It was last
at $1.2462.
Europe vs US CESI https://tmsnrt.rs/2ml3ceE
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