* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
* Euro zone business growth stalls
* UK economy loses momentum
* Response to second wave of virus rattles investors (Updates prices, adds commentary, changes byline, previous dateline was LONDON)
By Sinéad Carew
NEW YORK, Sept 23 (Reuters) - The dollar expanded on its eight-week high on Wednesday as U.S. equities fell and investors worried about the pace of the global economic recovery as rising coronavirus infections in Europe brought restrictions and European economic data was weak.
Euro zone business growth ground to a halt in September, raising fears that fresh restrictions to quell a resurgence in coronavirus infections might put the economic recovery into jeopardy. Britain, the economy also lost momentum, a business survey showed, as consumer-facing sectors suffered, notably from the end of a government subsidy to support restaurants. market continues to re-evaluate its previously very optimistic stance on the status of global risks out there," said Ben Randol, senior FX strategist at Bofa Securities in New York.
"The newsflow has been negative on the virus and negative on growth. We've had some crummy data and also we've had the Fed speakers that have been on balance considerably less dovish than the market seemed to expect which puts positions at risk."
Randol also cited comments from the Federal Reserve that had a less dovish tone than the market had expected.
Chicago Federal Reserve President Charles Evans sent investors to the safety of the dollar on Tuesday by floating the idea of rate hikes. Fed Vice Chair Richard Clarida said on Wednesday policymakers "are not even going to begin thinking" about raising interest rates until inflation hits 2%. said Clarida's comment "suggests that the Fed still reserves the right to pre-emptively lift rates if it thinks that inflation will be a problem."
The dollar index =USD , which measures the dollar against a basket of six major currencies, was up 0.25% at 94.214 after earlier hitting 94.255, its highest level in two months.
The euro was last down 0.25% at $1.1677 fell to a two-month low of $1.16715 EUR=D3 in early morning trading, its lowest since July 27.
Traders in the pound and the euro were also worried that Britain and the European Union will fail to agree a free trade deal, which would cause additional economic strain.
While the pound GBP=D3 regained some ground as the session wore on to last trade at Tuesday's closing level of $1.2731, it fell earlier to $1.2676, its lowest since late July.
It came under pressure after British Prime Minister Boris Johnson introduced on Tuesday new restrictions to combat a second wave of the coronavirus. Australian dollar AUD=D3 was last down 1.13% at US$0.7093, after hitting a seven-week low of $0.70920. The New Zealand dollar NZD=D3 dropped 0.95% to $0.6571.
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Currency bid prices at 10:14AM (1414 GMT) Description
RIC
Last
U.S. Close Pct Change
YTD Pct
High Bid
Low Bid
Previous
Change
Session
Euro/Dollar
$1.1677
$1.1706
-0.25%
+4.17%
+1.1718
+1.1673 Dollar/Yen
105.2000
104.9100
+0.28%
-3.36%
+105.2300 +104.9100 Euro/Yen
EURJPY=
122.83
122.83
+0.00%
+0.72%
+123.0400 +122.6000 Dollar/Swiss
CHF=
0.9228
0.9192
+0.39%
-4.65%
+0.9230
+0.9190 Sterling/Dollar GBP=
1.2731
1.2731
+0.00%
-3.98%
+1.2759
+1.2677 Dollar/Canadian CAD=
1.3358
1.3301
+0.43%
+2.86%
+1.3362
+1.3294 Australian/Doll AUD=
0.7093
0.7174
-1.13%
+1.03%
+0.7177
+0.7095 ar
Euro/Swiss
EURCHF=
1.0778
1.0767
+0.10%
-0.68%
+1.0778
+1.0754 Euro/Sterling
EURGBP=
0.9170
0.9193
-0.25%
+8.47%
+0.9218
+0.9163 NZ
NZD=
0.6571
0.6634
-0.95%
-2.45%
+0.6647
+0.6573 Dollar/Dollar
Dollar/Norway
9.4146
9.3393
+0.81%
+7.25%
+9.4176
+9.3338 Euro/Norway
EURNOK=
10.9960
10.9480
+0.44%
+11.78%
+11.0002
+10.9260 Dollar/Sweden
SEK=
8.9543
8.9076
+0.25%
-4.21%
+8.9578
+8.9086 Euro/Sweden
EURSEK=
10.4567
10.4305
+0.25%
-0.12%
+10.4600
+10.4307