The euro gained after an index of manufacturing in the dozen nations using the currency showed the pace of contraction slowed in January and the outlook for coming months improved, traders said.
The Reuters Purchasing Managers' Index for the euro region rose to 46.2 in January from 44.1 in December. A reading below 50 indicates contraction, and above 50 indicates an expansion.
Growth in the 12 nations that share the euro may be picking up. A report yesterday showed retail sales rose 1.2 percent in November, the biggest gain since April 2000.
Europe's common currency rose to US$0.8619 per euro, from US$0.8593 yesterday.
The US currency briefly pared losses against the yen and the euro after US manufacturing improved in January for a third month, a sign the economy is pulling out of recession.
A monthly index from the Institute for Supply Management rose to 49.9 last month from 48.1 in December, suggesting factories may soon recover from an 18-month slump. A report earlier today showed the US unemployment rate unexpectedly fell to 5.6 percent in January, the first decrease since May last year.
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