(Reuters) - Strong U.S. private sector jobs data and concerns over the euro zone's debt crisis sent the single currency sharply lower on Thursday, while stocks pared losses on hopes of a robust recovery in the world's biggest economy. U.S. stock index futures also reversed direction after the Automatic Data Processing (ADP) report showed private sector employers added 325,000 new jobs in December. "The (ADP) number is stunning," said Wayne Kaufman, chief market analyst at John Thomas Financial in New York. "It fits in well with improvements we've seen in consumer sentiment, and obviously that's because there are more people getting paychecks, which is making everyone happier," he added. The ADP report follows a string of better than expected U.S. economic data, and Friday's influential U.S. non-farm payrolls report for December is also expected to show strong growth. The euro extended losses against the dollar, trading at around $1.2816, down from the $1.2833 just before the ADP data and after earlier touching a session low of $1.2801. The dollar rose 0.7 percent against a currency basket .DXY, with its index trading at 80.68. The weakness in the euro helped keep the U.S. currency near levels touched last week that are its strongest in roughly a year. FRENCH DEBT SALE SOLID The single currency dipped slightly to fresh lows after the French government's first bond auction for 2012, which saw solid demand at higher yields. The sale was viewed as a key test of sentiment after European Union leaders agreed a plan to tackle the debt crisis in December and a move by the European Central Bank to pump nearly half a trillion euros into the region's troubled banks. Markets have also been bracing for France to lose its top-notch credit rating after agency Standard & Poor's warned in early December of a mass downgrade of euro zone states due to concerns about the bloc's two-year old debt crisis. A sterner test of investor sentiment towards Europe is expected next week when Spain and Italy - the two big economies seen as most at risk from the crisis that has already dragged down Greece, Ireland and Portugal - are due to issue bonds. The FTSEurofirst 300 .FTEU3 index of top European shares, which fell ahead of the French bond auction, trimmed its losses after the ADP report. The index was down 0.4 percent at 1,017.37 points, having been as low as 1,011.28 earlier. Fears that European banks will struggle to raise fresh capital to repair their ravaged balance sheets had dragged stocks lower after Italy's largest bank, UniCredit (CRDI.MI), had to heavily discount a rights issue to sell the shares on Wednesday. The European banking sector was again the main drag on stocks, with the STOXX Europe 600 Banks index .SX7P down about 1.6 percent. The MSCI world equity index .MIWD00000PUS was down 0.4 percent building on losses seen earlier in Asian stock markets.

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