The euro snapped a four-day streak of declines against the dollar after data showed the German economy grew at the fastest pace in two decades, spurring speculation that Europe’s recovery is gaining momentum. The yen extended a weekly loss against the dollar after minutes from the Bank of Japan’s July meeting, released today, showed policy makers were worried about the currency’s strength. New Zealand’s dollar gained as a report showed retail sales climbed at the fastest pace in more than three years. “The euro will get a good deal of support today,” said Geoffrey Yu, a currency strategist in London at UBS AG. “This may very well be the peak of the good news in the euro-zone.” The euro rose 0.5 percent to $1.2895 as of 7:27 a.m. in London. The yen dropped to 86.08 per dollar from 85.90 in New York yesterday, after advancing to 84.73 on Aug. 11, the strongest since July 1995. Japan’s currency fell to 111.07 per euro from 110.19. The European currency gained the most in almost two weeks against the yen. Futures on the Euro Stoxx 50 Index and the Standard & Poor’s 500 Stock Index rose, suggesting the stock markets would rise and decreasing demand for the safest assets, such as the yen. Germany’s gross domestic product, adjusted for seasonal effects, rose 2.2 percent in the second quarter from the first quarter, when it gained an upwardly revised 0.5 percent, the Federal Statistics Office in Wiesbaden said today. That’s the fastest growth since records for a reunified Germany began in 1991. Economists predicted the economy would expand 1.3 percent, the median of 33 estimates in a Bloomberg News survey shows. Bank of Japan Japan’s currency has declined 0.7 percent versus the dollar this week, snapping a two-week gain. The euro has fallen 2.9 percent, the most since the week ended May 7. Some Bank of Japan board members said the central bank needs to closely monitor the effect of a stronger yen and falling stock prices on the economy, according to the minutes of the July 14-15 meeting published today. Prime Minister Naoto Kan and central bank Governor Masaaki Shirakawa may meet next week to discuss the currency, the Asahi Newspaper reported today, without naming a source. Japan’s currency fell from near a 15-year high yesterday afterShirakawa said policy makers were studying currency markets and how they affected the economy. “If expectations grow that policy is going to be aimed at weakening the yen, we could see a big move in dollar-yen,” Stephen Hull, London-based head of global currency strategy at Morgan Stanley, wrote in a note yesterday. “We wouldn’t be surprised to see a dramatic turn in the yen soon.” Central banks intervene in the foreign-exchange market when they buy or sell currencies to influence exchange rates. The New Zealand dollar ended four days of losses after the government said retail sales rose 1.3 percent in the three months ended June 30, beating the median estimate for a 0.3 percent increase.

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