* Weak Germany PMI fans ECB rate cut speculation * Slower China manufacturing growth helps yen recover * Dollar volatile vs yen on bogus AP White House blasts tweet NEW YORK, April 23 (Reuters) - The euro dropped to a two-week low against the dollar on Tuesday as weak German data raised concerns about the health of the euro zone economy and revived speculation that the European Central Bank could cut interest rates. The yen saw brief volatility after an Associated Press tweet, quickly shot down as bogus, saying there were two explosions at the White House. However, after it was denied and the tweet was blamed on hackers, traders quickly moved on. "That was an algorithmic move, directly related to the selloff in equity futures," said Lane Newman, director of foreign-exchange trading, ING Capital Markets, New York. "No humans touched the machines unless they had orders to execute." The euro fell as low as $1.2971 and market watchers say it may break decisively out of the $1.30-to-$1.32 range that has held for the past few weeks. It was last trading 0.5 percent lower on the day at $1.2998. A survey showed Germany's private sector shrank for the first time in five months in April, overshadowing improvements in French economic data. The U.S. manufacturing sector was far from upbeat and, taken with China's soft factory growth numbers for April, the reports fueled concerns about a global slowdown. "Given the deteriorating fundamentals in the euro zone, the prospect of (an ECB rate cut) has certainly increased," said Boris Schlossberg, managing director of FX strategy at BK Asset Management in New York. "A rate cut would be the quickest and least expensive policy course." Comments on Monday from policymakers about slowing inflation and weak growth prospects in the euro zone suggested the ECB may be leaning toward a cut in its main refinancing rate, which stands at a record low 0.75 percent. More losses could push the euro toward chart support at its 200-day moving average around $1.2936 and the early April low of $1.2740. Ken Dickson, investment director at Standard Life Investments in Edinburgh, said the euro zone single currency should be significantly lower. Standard has had a short euro position for some time. "A rate between $1.10 and $1.20 is reasonable over the next three or four quarters." But the euro jumped to a one-month high against the Swiss franc, with several traders citing speculation the Swiss National Bank could raise the floor for the currency pair's movements. It last traded at 1.2285 francs, up 0.7 percent on the day. The SNB imposed an exchange rate cap at 1.20 francs per euro in September 2011, meaning it would not tolerate a euro/Swiss Franc rate below 1.20. There has been sporadic talk among traders ever since suggesting that the cap could be moved higher, to 1.25 francs. The SNB said it had no comment. The euro fell 0.3 percent to 129.22 yen, still down from its April 11 three-year peak around 131.10 yen. The yen, which typically rises as investors seek safety during times of heightened concern about the global economy, recovered broadly. The dollar last traded up 0.3 percent at 99.45 yen. The dollar has faced stiff resistance at the 100 yen level, having stalled at a four-year high of 99.95 yen earlier this month, but most analysts and traders still believe it is on track to scale this peak. Strategists said the yen could take its cue from the next batch of Japanese capital flows data due on Thursday. A focal point for the yen is whether the BoJ's aggressive monetary easing will prompt Japanese investors to increase their purchases of higher-yielding overseas assets. The following day, investors will look to the BoJ's policy meeting for clarity on how policymakers intend to implement the easing measures. Some US$4.26 billion in euros changed hands on Tuesday compared with $4.789 billion the same day a week ago., using Reuters Dealing data. US$3.14 billion in yen changed hands, compared with US$3.94 billion a week ago.