By Lukanyo Mnyanda and Yoshiaki Nohara March 29 (Bloomberg) -- The yen and dollar fell against as most major currencies as evidence the global recovery is gathering momentum reduced demand for relative safety. The euro rose as Greece hired banks to sell seven-year bonds in the first sale since European leaders agreed last week on a plan to help the nation contain its deficit. Japan’s currency weakened for a fourth day against the euro in the longest losing streak in five weeks before a report forecast to show U.S. consumer spending increased in February. “There’s definitely some risk appetite out there,” said Elisabeth Andreew, chief foreign-currency strategist at Nordea Bank in Copenhagen. “There’s been a lot of focus on Greece, and the euro-dollar is catching up.” The yen declined 0.4 percent to 124.60 per euro at 7:23 a.m. in New York, from 124.06 on March 26. The euro advanced 0.5 percent to $1.3475, from $1.3410. Japan’s currency was little changed at 92.47 per dollar, compared with 92.52. It slipped to 92.96 yen on March 25, the weakest level since Jan. 8. The euro rose after the European Union enlisted the assistance of the International Monetary Fund last week to help Greece finance the region’s biggest budget deficit should it run out of options in capital markets. Prime Minister George Papandreou’s government has to complete as much as 15.5 billion euros ($20.9 billion) of its 2010 fund raising by the end of May, according to an estimate from the nation’s debt agency. Greece’s Bond Issue Greece may price a benchmark issue of bonds to yield about 3.10 percentage points over the benchmark mid-swap rate, according to two bankers involved in the transaction, who declined to be identified before the sale is completed. The euro has decreased 5.9 percent against the dollar this quarter in what would be its biggest loss since the three months ended Sept. 30, 2008, two weeks after Lehman Brothers Holdings Inc. collapsed. A recovery of the euro against the dollar may be limited on speculation a strong U.S. jobs report will prompt traders to bet on higher interest rates, according to Royal Bank of Scotland Group Plc. “The dollar has picked up significant yield advantage,” Greg Gibbs, an RBS currency strategist in Sydney, wrote today in a report. “The fall in the euro is entirely justified on the rate moves. The prospect of a strong U.S. payrolls report this week will cap the euro.” U.S. Consumer Spending Goldman Sachs Group Inc. and Citigroup Inc. ended bets on a falling dollar last week after the trades lost 2.8 percent. Strategists are raising greenback forecasts at the fastest pace since last March, just before U.S. stimulus efforts that poured as much as $12.8 trillion into the economy ended the currency’s strongest rally in 28 years. Median predictions for the dollar against 47 currencies tracked in Bloomberg surveys rose an average of 1.4 percentage points in the month to March 24. The difference in the number of wagers by hedge funds and other large speculators on a decline in the euro compared with those on a gain was a record 74,917 contracts on March 23, according to data from the Commodity Futures Trading Commission. Gain in Aussie Australia’s dollar strengthened after Reserve Bank Governor Glenn Stevens said house prices are “getting quite high” and signaled interest rates may need to be increased further. Stevens told Channel Seven it was important for borrowing costs to be returned to “normal” levels. The interview was recorded on March 22. Retail sales rose 0.3 percent in February after gaining 1.2 percent in the previous month, according to the median forecast of 19 analysts in a Bloomberg survey. The report from the statistics bureau is due on March 31. “Retail trade is really the indicator of the degree to which interest-rate hikes are starting to affect the consumer,” said Amy Auster, head of foreign-exchange and international economics research at Australia & New Zealand Banking Group Ltd. in Melbourne. Australia’s dollar rose 1 percent to 91.33 U.S. cents and advanced 0.8 percent to 84.40 yen. --With assistance from Ron Harui in Singapore and Candice Zachariahs in Sydney. Editors: Dennis Fitzgerald, Dave Liedtka To contact the reporters on this story: Lukanyo Mnyanda in London at lmnyanda@bloomberg.net; Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net

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