The euro rose toward a one-month high after German government spokesman Steffen Seibert said Chancellor Angela Merkel told U.S. President Barack Obama that the 17-nation region will overcome its debt crisis. The single currency advanced against most of its major counterparts after European Central Bank President Jean-Claude Trichet indicated his willingness to sanction bond rollovers in Greece. Australia’s dollar retreated from near a four-week high against the greenback after the Reserve Bank said today its current monetary policy remains appropriate. “All we are really seeing is a short-term flare-up followed by resolution, and that’s been a process we’ve seen for a while now,” said Adam Carr, a senior economist in Sydney at ICAP Australia Ltd., a unit of the world’s largest interdealer broker. “We are close to the phase of resolution, and I would imagine that would be a good point to see the euro push higher, probably towards $1.47.” The euro advanced to $1.4607 at 1:40 p.m. in Tokyo from $1.4576 in New York yesterday, when it rose to $1.4658, the highest level since May 5. The single currency climbed to 117.24 yen from 116.75 yen. The yen fetched 80.26 per dollar from 80.10 yesterday, when it touched 79.98, the strongest since May 5. Australia’s dollar traded at $1.0702 from $1.0713 yesterday, after earlier rising as high as $1.0758. It reached $1.0775 on June 3, the highest since May 11. The Aussie was at 85.89 yen from 85.81 yen. Merkel, Obama Merkel told Obama the euro region will “emerge strengthened” from the crisis, according to Seibert. Obama and Merkel discussed the topic in Washington yesterday evening, including the steps Europe is taking to combat the crisis, Seibert said in an interview on Germany’s ARD television. ECB’s Trichet yesterday gave his first signal endorsing measures to encourage investors to buy new Greek bonds to replace maturing securities. While Trichet opposed imposing losses on creditors, “that doesn’t mean that we are against the fact that the private sector, as has been asked a year ago when there was a first program for Greece, financial institutions in Europe were asked to maintain their level of outstanding credit,” he said in Montreal. “That is not a default. That is something the European Central Bank would consider appropriate.” The ECB is considering a rollover of bonds as an alternative means of easing Greece’s funding squeeze, two officials familiar with the matter said last week on condition of anonymity. European Officials Under the plan being discussed by European officials, investors may be given preferred status, higher coupon payments or collateral as incentives to roll over the holdings when they mature, two separate officials, who declined to be identified because the talks are in progress, said last week. The euro has strengthened 1.2 percent in the past week, according to Bloomberg Correlation-Weighted Currency Indexes, underpinned by signs of recovery in Europe. Demand for the Aussie weakened after the Reserve Bank of Australia left its benchmark interest rate unchanged for a sixth-straight meeting as signs of slower growth from the U.S. to China dimmed prospects for an acceleration in hiring at home. Central bank Governor Glenn Stevens today held the overnight cash rate target at 4.75 percent in Sydney, as forecast by 23 of 28 economists surveyed by Bloomberg News. Five had predicted a quarter percentage-point increase. To contact the reporter on this story: Ron Harui in Singapore at rharui@bloomberg.net; Kristine Aquino in Singapore at kaquino1@bloomberg.net To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

Source