NEW YORK, Oct 1 — The euro fell to its lowest in two-and-a-half years against the US dollar yesterday as concerns about euro zone growth weighed on the single currency, while the greenback benefited from seasonal demand an uncertainty arising from the US-China trade war.

German annual inflation unexpectedly slowed for the third consecutive month in September, data showed yesterday.

"The German CPI print this morning was a little bit on the disappointing side,” said Bipan Rai, North America head of FX strategy at CIBC Capital Markets in Toronto.

Germany’s leading economic institutes have also revised down their growth forecast for Europe’s biggest economy for this year, two sources with knowledge of their decision told Reuters yesterday.

The revisions, which feed into the government’s own outputprojections, reflect growing concerns that a slowdown in Germanydriven by a recession in the export-dependent manufacturingsector could hamper the broader euro zone economy.

Demand for dollars heading into the last quarter of the yearis also boosting the greenback.

"In Q4 we tend to see strong seasonal demand for the USdollar, and given the fact that euro/dollar is the mostfrequently traded pair in the foreign exchange market, thatcertainly means that we could be seeing some further downside inthe euro going forward,” Rai said.

The euro fell 0.36 per cent to US$1.0899 (RM4.56), after earlier falling to US$1.0883, the lowest since May 2017.

Investors are also focused on the US-China trade war, which is being blamed for slowing global growth.

President Donald Trump’s administration is considering delisting Chinese companies from US stock exchanges, three sources briefed on the matter said on Friday, in what would be a radical escalation of US-China trade tensions.

China warned on Monday of instability in international markets from any "decoupling” of China and the United States.

Washington and China are preparing for another round of trade talks scheduled for October 10 and 11.

Uncertainty around the outcome of an impeachment inquiry into Trump may also provide safe-haven demand for the greenback.

Trump on Monday escalated his attacks against the lawmaker leading the impeachment inquiry against him, suggesting that

Representative Adam Schiff be arrested for "treason.”

New Zealand’s dollar dropped as low as US$0.6247, its weakest since 2015, after a survey showed business sentiment weakening to an 11-1/2 year low in September, strengthening the case for a reduction in interest rates. — Reuters