The euro and U.S. stock index futures briefly pared gains after a dose of dour economic data cast doubts on the U.S. economy's strength and led share prices in Europe to retreat on Tuesday.

U.S. manufactured goods orders fell in January by the most in three years as demand slumped across the board, suggesting the U.S. economy started the year on weaker footing than expected.

Durable goods orders dropped 4.0 percent, the biggest decline since January 2009, when the economy was still mired in a deep recession, data from the Commerce Department showed.

U.S. Treasuries prices rose after the government report, with benchmark 10-year notes up 4/32 in price to yield to 1.92 percent.

European shares retreated. The FTSEurofirst 300 .FTEU3 index of leading European shares was down 0.3 percent at 1,070.29 points.

The euro was up 0.3 percent at $1.3434, just off a three-month peak of $1.3487 set on Friday.

People looked at the durable goods and said: that's a shocking, said Trevor Coote, head of equity sales at Alexander David Securities said.

While the data was disappointing, analysts did not see it as a game changer.

When you look at all the details, the headline was weak, the core orders were weak. It's pretty hard to spin this as anything other than a slight disappointment, emphasis on slight, said Nick Bennenbroek, head of FX Strategy at Wells Bargo in New York.

S&P 500 futures and the Dow Jones industrial average futures were slightly above break-even, while Nasdaq 100 futures were up 0.1 percent.

Earlier in Europe, a fall in oil prices and the European Central Bank's looming cash boost for banks lifted the euro and initially shares, even as some investors worried that the benefits of a second injection of cheap money may be short-lived.

Brent crude oil futures slipped to around $123 a barrel from highs above $125.50 late last week, ending a surge that had dampened demand for other commodities and slowed the gains in global stock prices.

Markets expect European banks to borrow about 500 billion euros ($670 euros ($670 billion) of the cheap funds on offer from the ECB on Wednesday, although forecasts range from 200 billion to 750 billion euros.

The euro has priced in a cash injection of 500 billion euros and anything above 600 billion will be risk positive and push the euro higher, said Ankita Dudani, G-10 currency strategist at RBS Global Banking.