The euro fell for a second day against the dollar on speculation Greece will be unable to avoid a default even after officials said debt restructuring isn’t being discussed. The single currency declined to a two-week low versus the yen on concern election gains for Finland’s euro-skeptic bloc will hinder regional efforts to assist ailing nations including Portugal. New Zealand’s dollar weakened against all its major counterparts after a report showed consumer prices in the nation rose less than economists forecast. “We are seeing signs the debt crisis in Europe is resurfacing,” said Misato Nakashima, a currency analyst at Himawari Securities Inc. in Tokyo. “The euro is poised to weaken as people have been cautious about its rapid advance recently.” The euro fell to $1.4369 as of 6:49 a.m. in London from $1.4430 last week in New York, after dropping to $1.4350, the weakest since April 8. Europe’s currency weakened 0.7 percent to 119.19 yen, after slipping to 118.94, the lowest since April 1. The dollar fell 0.3 percent to 82.92 yen. The cost of insuring Greek government debt rose to a record on April 15, with the contracts indicating investors see a greater than 60 percent chance the nation will default within five years. Greece received a bailout from the European Union and the International Monetary Fund last year, and was followed by Ireland and Portugal in seeking aid. ‘Not an Issue’ “Restructuring is not an issue we’re discussing,” Greek Finance Minister George Papaconstantinou said in an April 16 interview in Washington. Greece found support from IMF Managing Director Dominique Strauss-Kahn and French Finance Minister Christine Lagarde after German Finance Minister Wolfgang Schaeuble was quoted as saying “further measures may have to be taken” if Greece fails an audit in June. An aid program to Greece was designed on the assumption the country would repay debt rather than restructure, and “nothing has changed,” Strauss-Kahn said as he hosted the IMF’s semi- annual meetings in the U.S. capital. Lagarde said April 14 there was no discussion about restructuring. Resistance to bailouts is growing in Europe. Support for the True Finns, whose leader Timo Soini says taxpayers shouldn’t have helped rescue Greece or Ireland, jumped almost 15 points to 19 percent in Finland’s elections, the Justice Ministry said. True Finns The True Finns will seek a majority that allows them to block the euro region’s bailout mechanism, Soini has said. The pro-Europe National Coalition led by Finance Minister Jyrki Katainen won 20.4 percent to become Finland’s biggest party for the first time. “We’re looking at a couple of days of uncertainty about who will form the next coalition government in Finland, what their political stripes might be and how they feel about the euro-zone bailouts,” said Gareth Berry, a foreign-exchange strategist at UBS AG in Singapore. “There are potentially some problems for the euro flowing from this.” The New Zealand dollar dropped the most in four weeks versus the greenback as traders cut bets on the amount of interest-rate increases from the central bank after Prime Minister John Key said inflation pressures are still weak. China increased banks’ reserve requirements yesterday to cool inflation and central bank Governor Zhou Xiaochuan said monetary tightening will continue for “some time.” ‘More Cautious’ “Investors are starting to get more cautious about risk exposures with fears of increasing Chinese policy tightening and difficulties with regard to a Greek debt restructuring,” said Mike Jones, a currency strategist at Bank of New Zealand Ltd. in Wellington. “Some near-term pullback” in the kiwi is overdue. New Zealand’s consumer prices rose 0.8 percent in the first quarter from three months earlier, the government said today. Economists surveyed by Bloomberg forecast a 1 percent gain. The so-called kiwi fell 0.8 percent to 79.29 U.S. cents, the biggest decline since March 17. The dollar fell to the lowest this month against the yen before a report this week that economists said will show manufacturing in the Philadelphia region expanded at a slower pace in April. “The U.S. economy itself hasn’t changed much,” said Tetsuya Inoue, chief researcher for financial markets at Nomura Research Institute, a unit of Japan’s largest brokerage. “There was a view they may start paring monetary easing before June, but that outlook has disappeared. The dollar has fallen broadly.” The Federal Reserve Bank of Philadelphia’s general economic index fell to 36 this month from 43.4 in March, according to a Bloomberg News survey before the April 21 report. The Fed next meets April 26-27 with the central bank’s $600 billion purchases of Treasuries set to end in June. To contact the reporters on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net; Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net.

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