The dollar fell to session lows against the euro on Monday after data showed that service sector activity in the U.S. slowed unexpectedly in December, led lower by a drop in new orders.
EUR/USD rose to session highs of 1.3651 and was last up 0.41% to 1.3645.
The dollar slid after the Institute of Supply Management said its non-manufacturing purchasing manager''s index declined to 53.0 in December from 53.9 in November.
Analysts had expected the index to increase to 54.5.
The new orders index contracted after 52 consecutive months of growth for the first time since July 2009, falling to 49.4. The employment index ticked up to 55.8, indicating growth in employment for the 17th consecutive month and at a faster rate.
In the euro zone, data released on Monday showed that the bloc’s services PMI came in at 51.0 in December, unchanged from the preliminary estimate and down slightly from 51.2 in November.
Separate reports showed that activity in Spain’s private sector expanded at the fastest rate in 77 months, but activity in France and Italy contracted last month.
The dollar was also weaker against the yen. USD/JPY fell to session lows of 104.15, and was last down 0.48% to 104.34.
Demand for the yen was boosted following sharp falls in Asian equities markets overnight after China’s services sector slumped to the weakest level since August 2011 in December, fuelling concerns over the outlook for growth in the world’s second largest economy.
The pound was almost unchanged against the dollar, with GBP/USD dipping 0.02% to 1.6415. The pair earlier touched session lows of 1.6338 after data showed that the U.K. services PMI declined to a six month low of 58.8 in December from 60.0 in November.
Despite the slowdown the index still remained well above the 50.0 level that indicates expansion. The report said confidence rose and the rate of economic growth still seems likely to have accelerated in the fourth quarter of 2013.
The dollar was lower against the Swiss franc, with USD/CHF down 0.22% to 0.9031.
The greenback was mixed against the Australian, New Zealand and Canadian dollars, with AUD/USD edging up 0.09% to 0.8956, NZD/USD rising 0.24% to 0.8291 and USD/CAD rising 0.30% to 1.0667.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.27% to 80.81.
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