Euro rises 1 pct vs dollar after China news

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NEW YORK, July 1 | Wed Jul 1, 2009 12:40pm EDT

NEW YORK, July 1 (Reuters) - The dollar extended losses against the euro on Wednesday after news that cited sources as saying China has asked to debate proposals for a new global reserve currency ta next week's Group of Eight summit.

The euro surged to session highs at $1.4201 EUR= after the report. It was last at $1.4177, up more than 1 percent on the day.

For the China story, click on [ID:nLAG003567].

"The dollar has been hit in a knee-jerk reaction to the news headlines, but we are skeptical of the merits," said Marc Chandler, head of global currency strategy at Brown Brothers Harriman in New York. "First, China is not a member of G8 and is hardly in a position to determine the agenda."

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Chizu Nomiyama)

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