* Fewer US private sector job losses, ISM services rise
* Portugal woes hit euro, CDS spreads at record highs
* EU approves Greek plan, euro surrenders early gains
* Norwegian central bank leaves benchmark rate unchanged (Recasts; updates prices, adds comment, changes byline)
By Gertrude Chavez-Dreyfuss
NEW YORK, Feb 3 (Reuters) - The dollar rose broadly on Wednesday, boosted by generally stable U.S. economic data while mounting worries about Portugal being the next euro zone country to come under pressure after Greece lifted the greenback against the euro.
Concerns about Portugal pushed the single euro zone currency toward a key $1.3900 figure, while the cost of insuring Portuguese government bonds against default rose to a record 196 basis points, according to CMA DataVision. For details, see [ID:nLDE6122GD]
Traders said credit default swap spreads widened after Portugal's debt agency IGCP cut its planned T-bill placement to 300 million euros from the planned 500 million as yields spiked higher compared with January's placement. [ID:nLDE6121G4]
"This dollar rally is being driven by euro weakness. Behind that is what's going on in Portugal -- its credit default swaps blew out today to new record highs," said Jacob Oubina, senior currency strategist, at Forex.com in Bedminster, New Jersey.
In early afternoon trading, the euro fell 0.3 percent to
$1.3916
News that the European Commission approved Greece's deficit-cutting plan initially boosted the euro, although its CDS swap spreads got back above 400 basis points. Analysts said the news did little to ease worries about fiscal problems in the euro zone.
Forex.com's Oubina said Spain is another concern amid the country's struggles to cut its fiscal deficit, which is expected to climb to 9.8 percent of gross domestic product in 2010. [ID:nLDE6121MU]
According to Oubina, Spain's five-year CDS spreads rose to 148 basis points, roughly a one-year high, citing CMA Datavision. The record was 170 basis points hit last year.
Analysts said these problems should continue to undermine the euro over the next few months even if a global recovery gains momentum and risk appetite improves.
Against the yen, the dollar rose to two-week highs at 91.28
yen
Gains in dollar/yen were helped by improving economic data on Wednesday, with the rise in January of the Institute for Supply Management's index of non-manufacturing companies to 50.5 from 49.8 in December.
Earlier in the session, data showed that the pace of U.S. job losses in the private sector slowed last month. [ID:nN03150829]
"The rally in dollar/yen confirms that forex traders are buying dollars on the hope that the U.S. economy returned to positive job growth last month," said Kathy Lien, director of currency research at GFT in New York.
"Based upon the latest reports, there are many reasons to believe that the labor market improved -- the question is by how much," she added.
The ICE Futures' dollar index <.DXY>, a measure of the greenback's performance against a basket of major currencies, rose 0.4 percent to 79.314, not far from a six-month high of 79.534 struck earlier this week.
Also on Wednesday, the Norwegian central bank held its benchmark rate steady at 1.75 percent, an outcome that had been expected after a rate increase last December.
The euro was last up 0.2 percent against the Norwegian
crown at 8.1630 crowns