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"It shows that a long-time bright spot for the economy is in decline and that adds to worries about the fragile state of the US economy," said Joe Manimbo, market analyst at Western Union Business Solutions in Washington. "It can also set the stage for a soft jobs number that will come on Friday."
The euro was last at $1.2575 after falling as low as $1.2567. The dollar was last down 0.4 percent against the yen at 79.44 yen after falling as low as 79.36 yen.