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Euro recovers slightly after last week's losses

The euro rebounded slightly against the dollar on Monday after sharp losses last week, helped by fresh data showing some unexpected weakness in the US economy.

NEW YORK: The euro rebounded slightly against the dollar on Monday after sharp losses last week, helped by fresh data showing some unexpected weakness in the US economy.

But the yen gained on both as continued global turbulence pushed traders to that safe haven.

At 2200 GMT, the euro climbed to $1.3529, compared to $1.3487 late Friday.

The dollar fell to 100.94 yen from 102.03 yen, and the euro dropped to 136.58 yen from 137.61.

The market took its first cues from purchasing managers indexes for the manufacturing sectors in China and Europe.

The fall of the Chinese PMI to just short of contraction territory generated worry for the global economy, while an upside surprise in the eurozone helping the euro.

"The dollar index began a decline near the start of the London session on better-than-expected releases of the manufacturing PMIs in France, Germany and the eurozone," said Benjamin Spier at DailyFX.

The sharp drop in the ISM manufacturing PMI for the United States, from 56.5 in December to 51.3 in January, sent shivers through the markets, sparking a two-percent selloff of stocks on Wall Street.

While some downplayed the downturn in the US indicator to a spate of bad weather, others said it underscored unexpected weakness in the economy, coming after poor reports on car sales, jobs and housing.

"There may be a silver lining: many of the ISM survey's respondents reported that consistently inclement weather during January was a veritable obstacle to growth," said Christopher Vecchio, currency analyst at DailyFX.

The British pound dropped to $1.6309 from $1.6435, while the dollar slipped to 0.9005 Swiss franc from 0.9060 franc.

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