By Oliver Biggadike and Ben Levisohn June 1 (Bloomberg) -- The euro erased losses against the dollar and yen as U.S. stocks reversed a decline after a report on manufacturing topped economists’ estimates. The euro earlier touched a four-year low against the dollar as unemployment in nations using the currency rose to the highest since before it was created, sapping confidence the economy can withstand the region’s debt crisis. Manufacturing in the U.S. expanded in May for a 10th month, Institute for Supply Management data showed. “We’re looking into the beast and everybody’s getting very bearish, and then all of a sudden you have a quite decent ISM number,” said Richard Franulovich, a senior currency strategist at Westpac Banking Corp. in New York. “Equities are bouncing, commodities are bouncing and that’s dragging the euro higher.” The euro was little changed at $1.2301 at 10:51 a.m. in New York, compared with $1.2306 yesterday. Earlier it fell as much as 1.6 percent to $1.2111, the lowest level since April 14. It traded at 112.25 yen, compared with 112.31 yen. Japan’s currency traded at 91.25, compared with 91.26. The Standard & Poor’s 500 Index rose 0.2 percent after falling as much as 1 percent.

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