FOREX-Euro struggles to regain footing after overnight fall

SINGAPORE HONG KONG Reuters -- The euro struggled to regain a footing on Thursday after falling overnight against a resurgence U.S. dollar, which benefited from safe-haven demand on renewed worries about higher rates and a global recession.

The euro was at $1.044 after losing 0.75% on the dollar the day before, heading for a monthly decline of 2.7%.

It also dropped to a fresh 7 -- 1 2 year low against the Swiss franc at 0.99663 francs, with the Alpine currency another beneficiary of safe-haven flows and still basking in the afterglow of the Swiss National Bank's surprise rate cut two weeks ago.

Christopher Wong, senior FX strategist at Maybank, said the euro's fall against the dollar was caused by the market moving away from riskier assets after central bankers warned of lasting inflation and that they would prioritise combating it resulting in a broad dollar rebound overnight. A steady and aggressive global switch to tighter policy has caused recession worries and shaken financial markets in recent months.

Speaking at the European Central Bank's annual conference in Sintra, Portugal, U.S. Federal Reserve Chair Jerome Powell said it was important to bring down inflation, even if it meant economic pain, with similar remarks from ECB President Christine Lagarde.

Ray Attrill, head of FX strategy at National Australia Bank, said that the German inflation figures briefly weighed on the euro, before the market realized that there was some special factors there, it wasn't a real downside surprise. The eurozone's energy supplies will get a lot of attention as we head towards winter. Attrill said that we're cautious about the euro.

The dollar was also on the front foot against other majors, with sterling hunkered down at $1.21225, with losses this week leaving it set for a 3.8% monthly decline, while the Australian dollar was struggling at $0.6873.

The dollar was at a 24 year peak of 137 yen overnight, as the gap between a hawkish Fed and a dovish Bank of Japan continues to weigh heavily on the yen, which was last traded at 136.57 yen.

Interest rates are pinned down by the BOJ because Japanese inflation is still low by global standards, though small price rises are causing a messaging problem for the central bank.

The dollar index, which measures the dollar against six peers, was at 105.19, a two week high.

The U.S. Securities and Exchange rejected a proposal to list a spot bitcoin exchange-traded fund by Grayscale, one of the world's biggest digital asset managers, and dipped below the symbolic $20,000 level on persistent marketructions.