### Clue: Swinging handbag, daughter knocks out penultimate member of gang in foreign capital (7)
### Answer: BAGHDAD 
 ### Explanation: Definition: foreign capital
 **Anagram of**(Swinging) [ "handbag" with "d"(abbrev. for "daughter") **replacing**(knocks out) **the last but one letter of**(penultimate member of) "gang" ].