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Morning business round-up: French bond sale hits euro

What made the business news in Asia and Europe this morning? Here's our daily business round-up:

The euro has dropped to its lowest rate against the dollar in 16 months after France sold 8bn euros ($10.3bn, £6.6bn) of bonds at an auction.

The euro fell to $1.2831 against the dollar and was at an 11-year low versus the yen.

France paid an interest rate of 3.29% to borrow for 10 years, up from 3.18% at the last sale in December.

China's biggest airlines will not pay a new European Union tax aimed at cutting carbon emissions, their trade body has said.

On 1 January, the EU brought airlines under its Emissions Trading Scheme (ETS), which levies a charge on flights based on their carbon emissions.

The tax has been criticised by China, India, the US and Canada.

It comes as China's trade surplus has narrowed for a third straight year as demand for its products weakened in the US and Europe.

Commerce Minister Chen Deming said the surplus was around $160bn (£103bn) in 2011. That compares with a record of $295bn in 2008.

China has warned that its export growth will come under more pressure this year as US and European economic problems persist.

The government has been trying to boost domestic demand as a result.

Greek Prime Minister Lucas Papademos has said Greece may default on its debts in March unless unions accept further cuts to salaries.

Mr Papademos said more cuts were needed to avoid exiting the eurozone.

Analysts say the warning is to prepare Greece for more austerity measures.

European Commission, International Monetary Fund and European Central Bank inspectors, known as the troika, arrive to assess Greece's progress in cutting its deficit on 15 January.

Activity in the UK service sector grew in December at its fastest rate since July, according to the latest purchasing managers' index (PMI).

The PMI for December was 54.0, up from 52.1 in November. Any figure over 50 indicates that the sector is growing.

But confidence about the future remains subdued, with business expectations matching September's two-and-a-half year low.

The report's author described conditions as "surprisingly buoyant".

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US web portal Yahoo has named Scott Thompson, the president of online payments firm Paypal, as its new head.

He will fill the vacancy left by Carol Bartz, who was dismissed as chief executive in September after failing to turn around the company's fortunes.

Mr Thompson has headed Paypal, the payments division of eBay, since 2008, during which time its userbase doubled.

Yahoo is currently undergoing a strategic review as it has failed to keep up with rivals such as Google.

Shares in Eastman Kodak have fallen 28% on speculation the photography firm was preparing to file for bankruptcy protection in the US.

Shares dropped 18 cents to a record low of 47 cents on Wednesday.

The sell-off was triggered by a report in the Wall Street Journal alleging Kodak was preparing a Chapter 11 filing after struggling to sell key assets.

The latest edition of Business Daily examines Brazil's fight to save its rain forests.

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