By Gavin Serkin April 6 (Bloomberg) -- The euro weakened and Greek bonds plunged as the 10-year yield premium to German debt widened to the most since the euro’s introduction a decade ago, reaching about 4 percentage points, on concern the European Union’s rescue plan for the nation may unravel. U.S. stocks fell and copper retreated from a 20-month high in New York. The euro dropped against 15 of its 16 most-traded peers at 10:01 a.m. in New York, while the U.K. currency declined against 12. Greek 10-year bond yields climbed above 7 percent for the first time in 10 weeks. Australia’s dollar advanced after the central bank raised its target rate for overnight borrowing. The Standard & Poor’s 500 Index declined 0.3 percent, and copper slipped 0.2 percent in New York. The euro depreciated after Market News International said Greece may want to bypass International Monetary Fund involvement in a rescue package. The Reserve Bank of Australia’s increase was the fifth in six meetings, adding to evidence world growth is rebounding after the U.S. said April 2 that employment expanded by the most in three years. The report that Greece “isn’t keen on the IMF being involved in any bailout would seem to throw the whole plan into question,” said Simon Derrick, chief currency strategist at Bank of New York Mellon Corp. in London. “As an investor, do you really want to hang around and see what’s happening next? The Greece story is definitely a negative for the euro.” The euro lost 1.4 percent against the yen and 0.8 percent compared with the dollar after Market News cited unidentified officials as saying Greece may seek a rescue package that doesn’t involve the IMF. European Union spokeswoman Amelia Torres said the EU wouldn’t comment on the report. Greek Response A Greek Finance Ministry official, responding to the Market News report, said the government is not pushing to renegotiate the terms of a potential rescue package to exclude IMF involvement. The government still backed the agreement announced last month after a summit of EU leaders who called for the IMF to play a central role in any aid package, said the official, who declined to be identified. Greek bonds fell for a third day, with the yield on the two-year note rising 1.3 percentage point to 6.41 percent. Credit-default swaps on Greek debt rose 7.5 basis points to 353.5, the highest level in five weeks, according to CMA DataVision prices. The Australian dollar strengthened 1 percent versus the euro and 0.2 percent against the U.S. dollar after central bank Governor Glenn Stevens increased the overnight cash rate target to 4.25 percent from 4 percent. The Canadian dollar traded at parity with the U.S. currency for the first time since July 2008. Pound Weakens The pound weakened 0.9 percent versus the dollar, and the yield on the 10-year gilt climbed 6 basis points to 3.98 percent on concern the election, which U.K. Prime Minister Gordon Brown announced today will be held May 6, won’t produce a clear winner. U.S. equities dropped after a year-long rally drove the S&P 500 to an 18-month high, pushing the benchmark gauge to the most expensive level this year at about 19 times reported operating earnings of its companies. Figures yesterday showed growth in U.S. service industries and home sales, adding to evidence the economy is strengthening after the government last week reported the biggest monthly jobs growth in three years. Europe, Emerging Markets The Stoxx Europe 600 index climbed 0.2 percent, erasing most of a 0.7 percent gain. Europe’s two largest oil companies, BP Plc and Royal Dutch Shell Plc, rose 1.5 percent and 1.1 percent respectively as crude oil traded near a 17-month high. Rio Tinto Group, the world’s third-biggest mining company, gained 2 percent. The MSCI Asia Pacific Index rose 0.3 percent. The MSCI Emerging Markets was little changed, after earlier reaching its highest level since July 31, as Kazakhstan’s KASE Stock Index and Ukraine’s PFTS Index rose at least 1.7 percent. U.S. Treasuries rose before a record-tying $40 billion sale of three-year notes today. The yield on the 10-year security fell 4 basis points to 3.94 percent, after surpassing 4 percent yesterday for the first time since June. Copper for delivery in three months slipped 0.2 percent to $3.6235 a pound in New York. Oil was little changed near its highest level in 17 months before a report forecast to show U.S. crude inventories increased last week while gasoline supplies fell. Crude for May delivery was at $86.86 a barrel, up 24 cents on the New York Mercantile Exchange. To contact the reporter responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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