Yen strengthens after Chinese services slow

European Services 

The euro rose for the first time in three days against the dollar as Markit Economics said its services index, based on a survey of purchasing managers, was 51 last month from 51.2 in November. That’s in line with an initial estimate on Dec. 16. A reading above 50 indicates expansion.

South Korea’s won weakened for a second day versus the dollar, dropping 1% to close at 1,065.42, the biggest decline since June 20. The currency jumped 7.2% against the greenback in the past six months.

The strong won is contributing to tighter monetary conditions that may hurt the recovery and prompt the central bank to cut its policy rate at a meeting this week, Goldman Sachs Group Inc. said in an e-mailed note.

“The early trend to the year appears to have been to liquidate or take profit on trades that did quite well through the second half of 2013,” said Jonathan Cavenagh, a strategist at Westpac Banking Corp. in Singapore. The won still looks “expensive” at these levels, he said.

Rand Gains

South Africa’s rand climbed 1.1% to 10.6397 per dollar after sliding to 10.76 on Jan. 3, the weakest since November 2008. The currency tumbled 19% last year.

The Bloomberg Dollar Spot Index fell after rising to a four-month high last week when Federal Reserve Chairman Ben S. Bernanke said headwinds for the U.S. economy may be abating. The central bank said on Dec. 18 it would trim bond buying by $10 billion a month starting in January.

Economists say U.S. reports today will show services expanded in December and factory orders rose in November.

The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, dropped 0.1% to 1,024.80 after climbing to 1,029.67 on Jan. 2, the highest since Sept. 9.

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