The euro fell from the highest this month against the dollar on concern a deal for Greece to buy back its bonds may falter, holding up disbursements of bailout funds to the nation.
The dollar extended gains after demand for goods such as machinery and electronics climbed by the most in five months in October. Euro-area finance chiefs and the International Monetary Fund said they would consider cutting Greece’s interest rates and giving it more time to pay back rescue loans after the repurchase of government debt. The Swedish krona declined at least 0.4 percent versus all 16 of its most-traded peers after consumer confidence was weaker than forecast.
“I’m a natural seller on euro here because giving Greece more money is not the solution to any problem -- it’s a band-aid at this stage,” said Fabian Eliasson, head of U.S. currency sales at Mizuho Financial Group Inc. in New York. “The market went fairly long euro before this so any kind of rattling news that something will jeopardize the deal, or further demands, is going to have a negative effect.”
Long refers to a bet that an asset will appreciate.
The euro fell 0.3 percent to $1.2939 at 9:42 a.m. New York time after advancing to $1.3009, the strongest since Oct. 31. It declined 0.1 percent to 106.33 yen after rising as much as 0.5 percent. The Japanese currency was 0.1 percent weaker at 82.17 yen per dollar.
The krona fell for the first time in five days against the euro, declining 0.8 percent to 8.6433, after consumer confidence fell for a fourth month in November. The central bank signaled it may cut interest rates next month for a fourth time since December as it predicts the Nordic region’s largest economy will suffer from falling demand from Europe.
In the latest bid to keep the 17-nation euro intact, the lawmakers cut the rates on bailout loans, suspended interest payments for a decade, gave Greece more time to repay and engineered a Greek bond buyback. The country was also cleared to receive a 34.4 billion-euro ($44.7 billion) loan installment in December.
The parliaments of three of the euro area’s AAA rated countries -- Germany, Finland and the Netherlands -- insisted on approving the accord, with Dec. 13 set as the deadline for a formal decision to unlock the next Greek aid tranche.