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FOREX-Dollar clings to 8-week highs on recovery worries amid COVID resurgence

    * Graphic: World FX rates in 2020
    * 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. 
    In 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. 
    "The 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
    Chicago Federal Reserve President Charles Evans sent investors to the safety of the dollar on Tuesday
by floating the idea of rate hikes.  
    Then Fed Vice Chair Richard Clarida said on Wednesday policymakers "are not even going to begin
thinking" about raising interest rates until inflation hits 2%.
    Randol 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, 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 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 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.
    The Australian dollar was last down 1.13% at US$0.7093, after hitting a seven-week low of
$0.70920. The New Zealand dollar dropped 0.95% to $0.6571. 
    Currency bid prices at 10:14AM (1414 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1677        $1.1706     -0.25%         +4.17%      +1.1718     +1.1673
 Dollar/Yen       JPY=        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
 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/Norway    NOK=        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
 (Additional reporting by Julien Ponthus in London)