GLOBAL MARKETS – Euro plunges to two-decade low against dollar as economic fears mount

* Euro returns to 2002 levels after weak data and soaring gas prices

* Wall St futures fall after US holiday

* RBA rises but Aussie falls sharply

* Chart: Overall asset performance

*Graph: world exchange rates

By Tommy Wilkes

LONDON, July 5 (Reuters) – The euro fell to its lowest level in two decades against the dollar on Tuesday as a fresh surge in natural gas prices rekindled concerns about the health of the economy. eurozone and data showed that eurozone business growth slowed sharply in June .

The euro fell 0.9% against the dollar to 1.0325 dollars, its weakest since December 2002. Against the Swiss franc, it fell 0.7% to 0.9941 francs, its lowest since 2015 .

“It will still be very difficult for the euro to recover significantly with the deterioration of the energy situation and the notable increase in risks to economic growth,” said Derek Halpenny, analyst at MUFG.

Survey data showed business growth in the eurozone slowed further last month and forward-looking indicators suggest the region could slip into decline this quarter as the cost-of-living crisis keeps consumers wary.

The dollar index gained 0.8% to 105.98, a new high in two decades for the currency.

Elsewhere, stock markets gave up early gains on Tuesday as the latest surge in natural gas prices rattled sentiment, offsetting earlier optimism about signs of easing trade tensions between the United States and China.

Australia’s central bank became the latest to extend its interest rate tightening cycle, rising a second consecutive year by 50 basis points, although the Australian dollar fell 0.8% as investors interpreted the bank’s accompanying message as being more accommodating than expected.

With US markets closed on Monday, trading is expected to be busier on Tuesday and Wall Street reversed early gains and headed towards 08:25 GMT.

Offering brief respite to jittery markets was a report that US President Joe Biden was leaning towards a decision on easing tariffs on goods from China as well as news that Chinese Vice Premier Liu He had spoken to US Treasury Secretary Janet Yellen.

A survey showing that services activity in China grew at the fastest pace in nearly a year also helped sentiment.

But as European trading resumed, the Euro STOXX reversed course and fell 0.43% for the last time while Germany’s DAX fell 0.6%. The FTSE 100 fell 1.05%.

In Asia, the MSCI Asia-Pacific ex-Japan equities indicator rose 0.17%.

Tuesday offers little in the way of key economic data, but later this week the US Federal Reserve and European Central Bank release their minutes from recent policy meetings and on Friday widely watched US payrolls data are released.

Redmond Wong, market strategist, Greater China, at Saxo Markets Hong Kong, said traders will continue to closely monitor the trajectory of inflation and growth in major markets.

“Market participants are still weighing the impact of the tug of war between inflation at persistently high levels and signs potentially pointing to an impending US recession,” he said.

Those concerns were front and center in South Korea, where June inflation accelerated to its highest level since the Asian financial crisis, stoking expectations that the central bank could offer a 50 basis point hike. for the first time next week to cool prices.

US Treasury yields came back from the holidays slightly higher, with the benchmark 10-year bond yield at 2.93% but failing to push back above the symbolic 3% level.

Eurozone government bond yields fell on uncertainty about the future path of monetary tightening by the European Central Bank and as investors fearful of the economic outlook sought safety.

Brent crude futures rose 0.2% to $113.8 a barrel, while U.S. crude oil rose 1.73% to 110.31 a barrel. Spot gold fell 0.29% to $1,804 an ounce.

(Additional reporting by Kane Wu and Alun John in Hong Kong; Editing by Robert Birsel)