NEW YORK (MarketWatch) -- The dollar and Treasury prices pared losses on Thursday as global stocks and the euro recovered after sliding late Wednesday following media reports stating that China was considering the sale of some of its holding of euro-denominated bonds. On Thursday, the China State Administration of Foreign Exchange, or SAFE, denied the reports as "groundless." in a statement on its website. Read more on China's reserves. "The Treasury market backed up further overnight as the consolidation continues and with comments overnight from China's" reserve manager, said strategists at CRT Capital Group. Yields on 10-year notes (UST10Y 3.27, +0.08, +2.57%) , which move inversely to prices, rose 8 basis points to 3.28%. A basis point is 0.01%. Yields on 2-year notes (UST2YR 0.84, +0.02, +2.94%) rose 2 basis points to 0.85%. Still to come is the government's sale of 7-year notes (UST7YR 2.73, +0.08, +2.87%) . The euro (CUR_EURUSD 1.2238, +0.0082, +0.6746%) rose to $1.2246, up from $1.2197 in late North American trade Wednesday. Read about euro, dollar. "We think the bond market is likely to correct and that today's 7-year auction will be a good indication of how far it has to go," said John Spinello, Treasury strategist at primary dealer Jefferies & Co. "Given the speed of the rally, technical support levels are 25 basis points higher." Treasurys stayed down after the Labor Department said the number of Americans filing first-time claims for unemployment benefits fell 14,000 to 460,000 in the latest week. A separately report said the economy grew at a revised 3.0% pace in the first quarter, slower than initially reported. Read about jobless claims.

Source