The euro gained for a second day against the dollar and the yen on optimism a bailout for Ireland will prevent contagion across the region’s larger debt markets. The 16-nation currency advanced from near a seven-week low versus the greenback as European Union and International Monetary Fund officials traveled to Dublin to discuss a possible aid package for Ireland’s banking sector while Spain prepared to sell bonds. The Dollar Index dropped for a second day before a report that economists said will show U.S. jobless claims rose last week. Taiwan’s dollar gained before data forecast to show the economy grew more than 8 percent for a fourth quarter. “A potential bailout of Ireland is temporarily good news for risk sentiment,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo. “This may lead to buying of the euro and selling of the yen and the dollar.” The euro climbed to $1.3603 as of 6:35 a.m. in London from $1.3529 yesterday in New York, after declining to $1.3448 on Nov. 16, the lowest level since Sept. 28. The single currency rose 0.5 percent to 113.15 yen. The Dollar Index, which tracks the greenback against a basket of six currencies, dropped 0.5 percent to 78.711. The U.S. currency traded at 83.17 yen from 83.18 yen. Ireland’s government will hold talks with the EU, IMF and the European Central Bank “over a number of days,” a Finance Ministry spokesman said yesterday. Discussions will be held at the Irish central bank, the country’s bond agency and the Finance Ministry. ‘Irish Problem’ “The Irish problem looks like it will be solved,” said Adam Carr, a senior economist in Sydney at ICAP Australia Ltd., a unit of the world’s largest interdealer broker. “The euro is managing to find some support.” European policy makers will scan the books of Ireland’s debt-laden banks to determine whether the government can fix the banking system on its own or needs to fall back on the 750 billion euro ($1.02 trillion) European Financial Stability Fund. Spain is scheduled to sell as much as 4 billion euros of 10-year and 30-year bonds today. The euro has appreciated 0.5 percent over the past week according to Bloomberg Correlation-Weighted Indexes, a measure of 10 developed-nation currencies. The dollar is up 1 percent and the yen has advanced 0.1 percent. Jobless Claims The dollar declined against 14 of its 16 most-active counterparts before the Labor Department releases its weekly unemployment data today. The number of U.S. citizens filing initial jobless claims rose 6,000 to 441,000 last week, according to a Bloomberg survey. The U.S. central bank risked a worsening outlook for inflation and jobs if it hadn’t embarked on its new asset purchase plan, Boston Fed President Eric Rosengren said yesterday. Fed Governor Kevin Warsh, Minneapolis Fed President Narayana Kocherlakota, Cleveland Fed President Sandra Pianalto and Philadelphia Fed President Charles Plosser are all scheduled to speak today. “The dollar has yet to switch to a bullish trend with high unemployment,” said Hitoshi Asaoka, senior strategist at Mizuho Trust & Banking Co. in Tokyo. “It’s not like the Fed can start raising rates in the next few months.” The Fed is buying about $75 billion in Treasuries per month through June to spur employment and inflation in a tactic called quantitative easing. The central bank acquired $1.7 trillion of Treasuries and mortgage debt under a previous program that ended in March. Taiwan Dollar Taiwan’s dollar jumped before a government report that economists said will show the economy expanded 8.34 percent in the third quarter from a year earlier. “The currency’s rise is supported by strong fundamentals as Taiwan’s economy keeps expanding,” said Eric Hsing, a fixed- income trader at First Securities Inc. in Taipei. The Taiwan dollar strengthened 1.4 percent to NT$30.372 against its U.S. counterpart. The currency climbed to NT$30.015 on Nov. 12, the strongest since March 2008. New Zealand’s currency rose for a second day after a government report showed producer prices climbed last quarter more than twice as fast as economists had predicted. “Given the extent of the upside surprise, we’ve seen markets sit up and take notice,” said Mike Jones, a currency strategist at Bank of New Zealand Ltd. in Wellington. “It’s another factor strengthening the case for Reserve Bank of New Zealand rate hikes from early next year.” The so-called kiwi rose 0.6 percent to 77.45 U.S. cents, and gained 0.5 percent to 64.42 yen. To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net; Ron Harui in Singapore at rharui@bloomberg.net. To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net.

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