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

Published 18/10/2019, 16:54
© Reuters.  GLOBAL MARKETS-Dollar weakens on Brexit, shares sapped by weaker China growth
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(Adds U.S. market open, byline, dateline; previous LONDON)

* China data, investor caution before Brexit vote, hits

markets

* China GDP grows 6.0% in third quarter, near three-decade

* Dollar weakens ahead of Brexit vote on Saturday

* Benchmark government bond yields nudge higher

By Herbert Lash

NEW YORK, Oct 18 (Reuters) - The dollar headed for 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 has rattled the

euro this year, while fears of a disorderly Brexit has slammed

sterling.

"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 0.16% to an almost two-month high of

$1.114. Sterling GBP= edged up 0.05% to a five-month high of

$1.2895.

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.

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 will rally around 5%. "The driver today is clearly the vote coming up and whether

Boris Johnson can pull the rabbit out of the hat and pull this

off," Mendelsohn said.

MSCI's gauge of stocks across the globe .MIWD00000PUS shed

0.21% while the FTSEurofirst 300 index .FTEU3 of leading

European shares fell 0.35%.

Asian stocks stumbled after China's third-quarter economic

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 just 6.0% year-on-year.

Chinese shares .CSI300 fell 1.2%.

Wall Street edged lower, dragged down by Johnson & Johnson

after it moved to recall a batch of baby powder, and as worries

about the global economy following China's GDP data offset a

string of earnings beats.

Robust earnings from Coca-Cola Co KO.N , Schlumberger NV

SLB.N and American Express Co AXP.N helped mitigate the

losses.

The Dow Jones Industrial Average .DJI fell 83.71 points,

or 0.31%, to 26,942.17. The S&P 500 .SPX lost 6.9 points, or

0.23%, to 2,991.05 and the Nasdaq Composite .IXIC dropped

46.25 points, or 0.57%, to 8,110.60.

U.S. Treasury yields fell as investors awaited the Brexit

vote on Saturday, with the benchmark 10-year U.S. Treasury note

US10YT=RR last up 5/32 in price to yield 1.7396%.

Oil prices steadied as concern over slower growth in China,

the world's biggest oil importer, was countered by bullish

signals from the Chinese refining sector, as well as optimism

surrounding the U.S.-China trade war.

Benchmark Brent crude oil futures LCOc1 fell 12 cents to

$59.79 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1

futures rose 6 cents to $53.99 a barrel.

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

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