Euro extends losses on positive US data

The euro extended losses against the dollar on after a report showed the US services sector expanded more than expected in January.

The euro was last down 0.5 per cent at $1.3090, compared with $1.3100 before the report though off the earlier session low of $1.3065.

US Treasuries yields hit session highs after data showed that the ISM non-manufacturing index for January increased and its employment index rose to the highest since February 2006.

Benchmark 10-year notes were last down a point in price to yield 1.94 per cent, up from 1.83 per cent late yesterday. Thirty-year bonds fell 3-20/32 in price to yield 3.15 per cent, up from 3.01 per cent.

Investors have been encouraged by upbeat economic growth data, though it has come mostly from the United States and Asia, rather than Europe.

However, data today showed that the euro zone's private sector economy snapped a four-month decline in January and expanded, albeit very weakly, according to a business survey that hinted the euro zone may avoid recession.

Britain's dominant services sector expanded at the fastest pace in 10 months in January.

Investors have become more confident of a debt swap deal involving Greece and its private sector creditors, and that the country can avoid a disastrous default.

Reuters