Euro, bond yields slip on report ECB policymakers doubt second half growth rebound

LONDON (Reuters) - The euro fell to a day’s low versus the dollar and core German bond yields slipped back towards zero on Tuesday after several European Central Bank policymakers expressed doubt about a long projected growth recovery in the second half of the year.

The latest concerns from policymakers comes barely five weeks after the ECB pushed out the timing of its first post-crisis rate hike until 2020 at the earliest amid a period of weakness and uncertainty for the eurozone’s economy.

The single currency fell 0.2 percent to $1.128 and also dropped to a day’s low against sterling of 86.27 pence.

ECB policymakers think the bank’s economic projections are too optimistic as growth weakness in China and trade tensions linger, four sources with direct knowledge of discussions told Reuters.

German 10-year bund yields briefly fell three basis points to a day’s low of 0.042 percent, before recovering slightly to stand at 0.052 percent.

Italy’s stock index hit the day’s low after the report. At 0924 GMT, the Milan benchmark was flat, paring earlier small gains.

Reporting by Tom Finn, Virginia Furness and Josephine Mason; Editing by Saikat Chatterjee