The European common currency reversed losses as investors reduced bets the ECB will follow the Federal Reserve by lowering borrowing costs to prevent the worst U.S. housing slump in 27 years from hurting the $10.5 trillion euro-region economy. The implied yield on the February interest-rate futures contract rose 12 basis points to 4.3 percent. The ECB's main refinancing rate is 4 percent.
The euro rose to $1.4669 at 7:46 a.m. in New York, from $1.4629 yesterday. It advanced to 156.46 yen from 156.11.
The euro was also underpinned after a private report showed German business confidence unexpectedly rose from a two-year low in January, a sign growth in Europe's largest economy may withstand the U.S. slowdown.