The dollar weakened for a second day against the euro and the yen before reports that economists said will show U.S. consumer spending slowed in April and pending home sales declined. The Dollar Index slumped to its lowest in a week on bets that flagging economic growth will deter the Federal Reserve from raising interest rates. The Swiss franc strengthened as European officials clashed over how to resolve Greece’s debt woes. New Zealand’s dollar climbed to a three-year high on speculation China will buy the South Pacific nation’s assets. “The market is more concerned about the U.S. than it is about Europe,” said Sonja Marten, a currency strategist at DZ Bank AG in Frankfurt. “We have weak growth in the U.S. When you look at the debt situation in the euro zone as a whole, it’s much better than in the U.S. More importantly, they’re doing something about it.” The dollar depreciated to $1.4256 per euro as of 8:28 a.m. in London, from $1.4145 in New York yesterday, after dropping to $1.4279, the least since May 20. The greenback weakened to 81 yen, from 81.29, and fell to a record 85.33 Swiss centimes, before trading at 85.76, from 86.56 centimes yesterday. The euro depreciated 0.1 percent to 1.2232 francs after sliding to an all-time low of 1.2165. The single European currency rose 0.4 percent to 115.43 yen. ‘Sell Dollars’ Growth in U.S. consumer spending slowed to 0.5 percent in April, the smallest gain in three months, according to a Bloomberg survey before today’s Commerce Department report. Pending home sales fell 1 percent in April, economists predict the National Association of Realtors will say today. “All things considered, the weak fundamental data should provide a ‘sell dollars’ environment in Asia,” Sacha Tihanyi, a Hong Kong-based senior currency strategist at Scotia Capital, the investment banking unit of Bank of Nova Scotia, wrote in a research note today. The Fed will raise its benchmark rate by 22 basis points over the next 12 months, a Credit Suisse Group AG index based on swaps showed. That compared with a prediction of 26 basis points a week ago. The Fed has kept the target for overnight loans between banks in a range of zero to 0.25 percent since 2008. European Concerns The euro headed for a weekly loss versus the franc and the yen before a European Commission report today forecast to show an index of executive and consumer sentiment in the region slid to 105.7 this month from 106.2 in April. Luxembourg Prime Minister Jean-Claude Juncker, who heads euro-area finance chiefs, said yesterday the International Monetary Fund may not release its share of a 12 billion-euro ($17.1 billion) aid package to Greece next month. “Concerns about sovereign debt are spreading in the region, weighing on the euro,” said Masahide Tanaka, a senior strategist in Tokyo at Mizuho Trust & Banking Co., a unit of Japan’s third-biggest bank by market value. “The European and U.S. economies are slowing down.” The euro has weakened 2.5 percent over the past month, according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-nation currencies. The franc strengthened 3.9 percent, and the yen rose 3.3 percent. Britain’s currency advanced to $1.6451, from $1.6405, pushing its gain this week to 1.4 percent. It was at 86.61 pence per euro, from 86.23 pence yesterday and 87.25 pence on May 20. An index of consumer sentiment rose 10 points from April to minus 21, the highest level in five months, London-based research group GfK NOP Ltd. said in an e-mailed report today. That’s the biggest increase since May 1993 and lifts the gauge from a level equal to that seen in the depth of the recession in February 2009. Kiwi Gains New Zealand’s dollar rose to the highest since March 2008 after Finance Minister Bill English said China Investment Corp., a sovereign wealth fund, is interested in buying his country’s government bonds at auction. Singapore, Hong Kong and Malaysia also are interested in buying New Zealand debt as Asian governments seek to reduce their reliance on U.S. dollar assets when investing their reserves, English was quoted as saying by the New Zealand-based Marlborough Express newspaper. New Zealand’s dollar climbed 0.5 percent to 81.55 U.S. cents after advancing to 81.99 cents, the strongest level since March 2008. The currency has risen 2.5 percent this week. To contact the reporters on this story: Lukanyo Mnyanda in Edinburgh at lmnyanda@bloomberg.net Candice Zachariahs in Sydney at czachariahs2@bloomberg.net To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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