Wires

FOREX-Dollar hobbled by Trump impeachment inquiry, weak U.S. data

Hideyuki Sano

* U.S. House Speaker announces launch of impeachment inquiry

* Yen, Swiss franc near highest levels in a few weeks

* Trump steps up rhetoric on China, cools trade deal hopes

* Pound buoyed after Supreme Court ruling, outlook unclear

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

TOKYO, Sept 25 (Reuters) - The dollar wobbled on Wednesday, as the U.S. House of Representatives moved to open a formal impeachment inquiry against President Donald Trump while weak U.S. consumer confidence data heightened worries over the Sino-U.S. trade row.

Following reports Trump sought foreign help to smear Democratic presidential front-runner Joe Biden, House Speaker Nancy Pelosi announced the House would initiate a formal inquiry, saying Trump appeared to have undermined national security and violated the U.S. Constitution.

The yen held firm at 107.09 yen to the dollar, having hit a two-week high of 106.96 the previous day. The safe-haven Swiss franc also rose to near three-week high of 0.9845 franc per dollar on Tuesday and last stood at 0.9859.

The euro, which was battered by weak euro zone economic data earlier this week, stood at $1.1017, off Monday's low of $1.0966.

Trump promised on Tuesday to release a transcript of his phone call with Ukrainian President Volodymyr Zelenskiy amid reports he withheld nearly $400 million in U.S. aid to Ukraine as leverage to get Zelenskiy to launch a probe that would damage Biden.

Fighting a political battle at home, Trump's rhetoric on China turned harsh as he delivered a stinging rebuke to Beijing's trade practices at the United Nations General Assembly, saying he would not accept a "bad deal" in U.S.-China trade negotiations.

"Trump's speech was full of sensitive words for China - trade practices, currencies, freedom of religion and so on. It is not hard to imagine it will irritate China," said Daisuke Uno, chief strategist at Sumitomo Mitsui Bank.

"In the past China has reacted to U.S. pressure on trade by bringing down the yuan. It appears we are having that settings again," he said.

The offshore Chinese yuan traded flat at 7.1051 per dollar .

The dollar was also undermined by data showing U.S. consumer confidence fell by the most in nine months in September, far more than expected.

"Net-net, consumer confidence plunged in September which counts as a big surprise that may sidetrack the economic expansion that is relying on consumer spending to fuel growth," said Chris Rupkey, chief financial economist at MUFG Bank in New York.

"This unwelcome news on souring consumer spirits is a startling new development that could even bring more rate cuts later this year from the Federal Reserve," he said.

Elsewhere, the British pound was well-bid after the UK Supreme Court ruled that Prime Minister Boris Johnson's decision to suspend parliament for five weeks was unlawful in a further blow to his ambition to pull Britain out of European Union next month with or without a deal.

Still, market players saw no signs of a sustainable rebound as the events further deepened the uncertainty investors now attach to the currency.

Sterling changed hands at $1.2492, not far from two-month high of $1.2582 set last week. (Additional reporting by Tomo Uetake Editing by Shri Navaratnam)