The euro swung between gains and losses against the dollar before Greek lawmakers vote on austerity measures needed to prevent the currency union’s first sovereign default. Greek Prime Minister George Papandreou called on lawmakers to obey their “patriotic conscience” as they began to debate a five-year budget plan yesterday. Sweden’s krona tumbled to a seven-month low against the euro after retail sales slumped. The pound declined amid speculation the U.K. central bank will keep rates at a record low for longer than previously forecast. “I don’t imagine that we’re going to see any momentum that would take the euro out of this range, given that this vote is so crucial and so imminent,” said Jane Foley, a senior currency strategist at Rabobank International in London. “If the votes aren’t successful, it could be Armageddon day for the euro zone. Therefore there is this underlying assumption that the votes will get passed.” The euro slipped 0.1 percent to $1.4274 at 6:46 a.m. in New York, after earlier gaining as much as 0.3 percent. The common currency weakened 0.2 percent to 115.37 yen. The dollar bought 80.90 yen, little changed from 80.89 yesterday, when it reached 80.98, the highest level since June 16. The euro fell earlier as European Central Bank Executive Board member Juergen Stark said he doesn’t expect the international community to further finance Greece after July if the country doesn’t implement its austerity plan. No Plan B “There is only this one plan A” for Greece, Stark said in an interview with Die Welt newspaper. He added that he doesn’t doubt the will of the Greek parliament overall to implement the agreed savings plan, according to the report. The shared currency snapped three days of declines yesterday amid speculation Greek creditors may be headed toward a so-called rollover agreement. Under a French proposal, half the Greek debt held by banks and insurers maturing in the next three years would be swapped for new 30-year Greek bonds. The redemptions from another 20 percent would be invested in a special purpose vehicle that would serve as collateral for the banks, two people familiar with the plan said. German Finance Ministry spokesman Martin Kreienbaum said in Berlin his government welcomes proposals from the private sector. French and German lenders are the biggest European holders of Greek debt. ‘Band-Aid Measures’ “It’s all just band-aid measures at the moment,” said Matthew Brady, executive director for foreign exchange at JPMorgan Chase & Co. in Sydney. “I’m still firmly in the camp that the euro will go lower.” One-month implied volatility for the euro-dollar exchange rate snapped a three day advance, slipping to 13.22. It was at 12.3 percent at the beginning of the month. The pound fell against all but one of its major counterparts tracked by Bloomberg as Bank of England policy maker Adam Posen said the U.K. economy is at “little risk of inflation,” adding to market speculation that interest rates may stay at a record low in coming months. Sterling weakened 0.2 percent to 89.48 pence per euro. It dropped 0.4 percent to $1.5930 and 128.86 yen. Posen, who has voted since October to extend the Bank’s bond buying under the quantitative easing program, said in a speech in Aberdeen, Scotland, that there is “little or no credit growth, little wage growth beyond productivity, little evidence of rising inflation expectations” in the U.K. Swedish Krona The krona plunged to its weakest level in almost seven months against the euro after Statistics Sweden said retail sales slipped an annual 1.1 percent in May. The median estimate of five economists surveyed by Bloomberg News was for a rise of 2 percent. The Swedish currency depreciated 0.7 percent to 9.2585 against the 17-nation euro. It slid earlier to 9.2738, the weakest level since Nov. 29. Against the dollar, it dropped 0.9 percent to 6.4925. The krona has declined 3.3 percent in the past month, making it the worst performer among 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Currency Indexes. The Swiss franc has surged 3.5 percent and the euro has gained 1 percent in the period, the indexes show. To contact the reporter on this story: Lucy Meakin in London at lmeakin1@bloomberg.net. To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net.

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