* Euro reverses losses, reaches toward session high
* U.S. stocks pare losses in afternoon trading

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By Vivianne Rodrigues

NEW YORK, Feb 25 (Reuters) - The euro reversed losses against the U.S. dollar on Thursday and touched a peak for the session so far as U.S. stocks cut declines in afternoon trading.

The euro hit a high of $1.3571 and was last changing hands at $1.3555, up 0.1 percent on the day, as the three main benchmark U.S. stock indexes pared declines. For details, see [ID:nN25229136]

But analysts said despite the bounce in the euro, sentiment is likely to remain negative.

The single currency earlier neared a nine-month low against the dollar and hit a one-year low versus the yen.

Worries of a sovereign debt default in the euro zone grew after ratings agency Standard and Poor's said late on Wednesday it may cut Greece's rating one or two notches within a month. [ID:nLDE61N2KL] (Editing by Padraic Cassidy)