* German flash PMI worse than expected in September
* Euro 0.5% falls vs dollar and Swiss franc
* Yen reverses earlier losses as markets grow worried
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Adds quotes, details, updates prices)
By Tommy Wilkes
LONDON, Sept 23 (Reuters) - The euro fell on Monday after
German flash purchasing managers' index survey data for
September was weaker than expected, raising more fears about the
health of the economy.
The survey showed that German private sector activity shrank
for the first time in 6-1/2 years in September as a
manufacturing recession deepened unexpectedly and growth in the
service sector lost momentum. "Manufacturing is even worse than it was during the (2013)
sovereign debt crisis," said Michael Hewson, CMC Markets'
analyst. "It suggests that Germany is not going to grow at all
in the second half of the year."
Business growth across the region has also stalled this
month, missing forecasts, another PMI survey showed.
Increasing talk of fiscal stimulus in the euro zone raised
bond yields in the region last week, but many analysts say it is
not enough to boost the single currency in the context of
concerns about global trade and slowdown fears.
Hewson added that the weakening euro suggested investors did
not think Germany - the euro zone's biggest economy - was moving
towards a significant fiscal package. The European Central Bank
has urged governments to focus on fiscal policy because the room
for more monetary easing is limited.
The single currency, trading around $1.10 before the numbers
were released, dropped 0.5% to as low as $1.0966 EUR=EBS , its
weakest since Sept. 12.
The euro also slid versus the Swiss franc, losing 0.5% to as
low as 1.0857 francs EURCHF=EBS .
"The ECB is being ignored for now and hence prospects of any
near-term shift in policy do not look particularly realistic,"
MUFG analysts said. "We see little upside scope for EUR/USD
here."
The dollar was boosted by the euro's decline, and its index
- which measures the greenback against a basket of currencies -
was last up 0.2% at 98.748 .DXY .
The dollar has held up well in recent months as investors
are attracted to its relatively high yield and the strength of
the U.S. economy.
Elsewhere, foreign exchange markets reflected fading
optimism over a U.S.-China trade deal.
Both China and the United States published positive
statements after the latest talks, with the U.S. Trade
Representative's office describing the talks as "productive" and
China's Commerce Ministry calling them "constructive". October's
high-level talks remain on track. But the safe-haven Japanese yen reversed its earlier losses
and was last up 0.1% at 107.41 JPY=EBS as any optimism was
overshadowed by worries about the health of the global economy.
China's offshore yuan dropped 0.1% to 7.1237 yuan CNH=EBS .
Sterling slipped 0.2% to $1.2442 GBP=D3 as British Prime
Minister Boris Johnson cautioned that there would be no Brexit
breakthrough at talks with European leaders in New York.
Euro vs U.S. dollar https://tmsnrt.rs/30JMXGc
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(Editing by Angus MacSwan and Ed Osmond)