The euro weakened versus the yen and the dollar amid speculation a European Union pledge to stabilize the region’s economy won’t resolve its sovereign-debt crisis. The 17-nation currency fell as a lawmaker from Greece’s ruling Pasok party said he hasn’t decided to vote for the country’s new austerity plan. EU leaders vowed to stave off a Greek default as long as Prime Minister George Papandreou, who won a confidence vote this week, pushes through a package of budget cuts and asset sales. South Africa’s rand tumbled as the debt crisis damped demand for higher-yielding assets. “There’s nothing going on but euro today,” said Andrew Wilkinson, senior market analyst at Interactive Brokers Group LLC in Greenwich, Connecticut. “Everybody seems to know what’s expected over the next few days; the difficulty is achieving it. The passage of the confidence vote was pretty slim, and all of Papandreou’s party members backed it, but you can’t assume the same will happen now.” The euro fell 0.5 percent to 114.20 yen at 8:38 a.m. in New York, from 114.78 yen yesterday. It weakened 0.2 percent to $1.4223, from $1.4256, and declined 0.3 percent to 1.1922 Swiss francs, after reaching a record-low 1.1846 yesterday. The shared currency pared its loss against the greenback as U.S. orders for durable goods rose more than forecast in May after slumping the prior month, and growth in first-quarter gross domestic product was revised to a 1.9 percent pace, from an earlier estimate of 1.8 percent. Rand Drops South Africa’s currency fell 0.6 percent to 6.8739 per dollar, from 6.8358, bringing its weekly decline to 1.7 percent. It dropped 0.3 percent to 9.7792 per euro. The euro region accounts for 45 percent of South Africa’s exports and 34 percent of its imports, according to government data. The rand closely tracks the euro, with a correlation of 0.683 this quarter. A value of 1 would mean they moved in lock step. EU leaders urged Greece to pass the austerity plan and vowed to do what’s needed to meet the country’s financing needs, the group said in a statement in Brussels yesterday. Greek lawmakers must approve the 78 billion-euro ($111 billion) package in a vote next week, a condition for receiving a fifth loan payment under an existing bailout and for future financing. Failure to secure aid would push Greece to the brink of default, with the country needing the funds to cover 6.6 billion euros of maturing bonds in August. On the Fence Thomas Robopoulos, a lawmaker for Greece’s ruling Pasok party, said he hasn’t decided whether he will vote for the government’s medium-term fiscal plan and implementation law in Parliament next week. “I will address parliament with the issues I have with these measures” on June 27, Robopoulos said by telephone today. Robopoulos said he hasn’t decided on voting against the two bills “but it is the direction I am leaning in.” European finance chiefs will decide on July 3 whether Greece has met conditions for its next aid payment. “We will follow very carefully what is being done,” European Central Bank President Jean-Claude Trichet told reporters yesterday after the first day of the EU leaders summit in Brussels, which concludes today. Morgan Stanley strategists advised selling the euro against the dollar, betting it will weaken to $1.36. “Despite the progress currently being made regarding providing aid packages to Greece, many hurdles still remain and uncertainty looks set to remain at elevated levels,” a team led by Hans Redeker, head of foreign-exchange strategy, wrote in an e-mailed report. “Meanwhile, the economic picture in Europe also looks like it is starting to deteriorate.” Ifo Institute The euro earlier rose after the Ifo institute said its business climate index for June, based on a survey of 7,000 executives, increased to 114.5 in June from 114.2 in May, confounding economist forecasts for a drop to 113.4. The 17-nation currency headed for its third weekly decline against the dollar, the longest losing streak since the period ended Feb. 11. It may fall for a third week against the yen. Investors still expect the European Central Bank to increase interest rates by 48 basis points in the next 12 months, according to a Credit Suisse index based on swaps. That compares to 17 basis points expected from the Federal Reserve. The Fed decided on June 22 to keep the central bank’s balance sheet at a record to support an economic recovery after completing $600 billion of bond purchases this month. To contact the reporters on this story: Allison Bennett in New York at abennett23@bloomberg.net; Paul Dobson in London at pdobson2@bloomberg.net. To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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