The dollar was set for its steepest two-day loss against the euro in five weeks and Asian stocks fell after Moody’s Investors Service said the U.S. may lose its Aaa debt rating. Gold rallied to a record. The U.S. currency declined 0.3 percent to $1.4212 per euro as of 1:23 p.m. in Tokyo, while the yield on 30-year Treasuries rose one basis point. The cost of insuring Asian corporate and sovereign debt against default was the most since September. The MSCI Asia Pacific Index slid 0.5 percent, while futures on the Standard & Poor’s 500 Index sank 0.4 percent. India’s benchmark stock index fell 0.7 percent after deadly bombings in Mumbai. Crude oil snapped a two-day rally in New York. Moody’s began its first U.S. review since 1995 as talks to raise the $14.3 trillion debt limit stall, reflecting concern political gridlock will lead to a default. Federal Reserve Chairman Ben S. Bernanke will testify for a second day before lawmakers amid data that will likely show retail sales slid in June. Italy will tap bond markets today as the Senate votes on budget cuts to tame Europe’s second-largest debt burden. “There’s uncertainty and confusion about whether we are going to see executives and legislators settle on the debt limit and the Moody’s review suggests that there may be a problem if they cannot reach a deal,” said Tim Leung, who manages about $1.5 billion at IG Investment Ltd. in Hong Kong. “There is a definite timeline for the U.S. debt ceiling discussion and also with financing the maturing papers from Italy, so both are risks in people’s mind.” Dollar Drops The dollar depreciated against 11 of its 16 most-actively traded counterparts, weakening 0.4 percent to 78.65 yen. The U.S. currency sank 1.4 percent against the euro yesterday, when Bernanke said he’s prepared to provide more stimulus if needed. Moody’s placed the U.S. rating under review, citing concern the debt threshold will not be raised in time to prevent a missed payment of interest or principal on outstanding bonds and notes. “This is somewhat unprecedented,” said Walter “Bucky” Hellwig, who helps manage $17 billion at BB&T Wealth Management in Birmingham, Alabama. “It just creates all kinds of questions about how do you play it? Nobody thinks they will actually default, but a downgrade could mean maybe higher rates.” President Barack Obama is considering summoning congressional leaders to Camp David this weekend to work on a plan to raise the debt ceiling, according to two people familiar with the matter. He “abruptly” walked out of yesterday’s White House meeting with legislative leaders on the deficit, House Majority leader Eric Cantor told reporters. JPMorgan, Google The S&P 500 rose 0.3 percent before the Moody’s announcement. Futures fell before companies from JPMorgan to Google Inc. report quarterly earnings. Data today will likely show retail sales slid 0.1 percent in June, following a 0.2 percent decrease in May, according to analysts surveyed by Bloomberg News. Treasury 30-year notes yielded 4.18 percent. The Markit iTraxx Australia index advanced 3.5 basis points to 123 basis points, the highest level since Sept. 1, according to Royal Bank of Scotland Group Plc and CMA. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan rose 2.5 basis points to 122, RBS prices show. That’s the highest since Sept. 24, according to CMA. The New Zealand dollar jumped 0.5 percent to 84.18 U.S. cents after earlier reaching an all-time high of 85.07. Gross domestic product rose 0.8 percent in the three months ended March 31 from the previous quarter, when it increased a revised 0.5 percent, government data showed today in Wellington. The central bank forecast 0.3 percent growth, as did economists surveyed by Bloomberg News. Singapore, India Singapore’s dollar pared gains after a trade ministry report showed the economy shrank in the second quarter. The currency was at S$1.2180 versus its U.S. counterpart, having hit a record S$1.2156 before the data. The won reached a three-year high of 1,054.10 against the dollar, its strongest level since August 2008. Japan’s Nikkei 225 Stock Average fell 0.7 percent, while South Korea’s Kospi Index declined 1.1 percent. Exporters led losses, with Samsung Electronics Co. and Nintendo Co. losing at least 2.2 percent. The Bombay Stock Exchange Sensitive Index fell after three bombs in crowded neighborhoods of Mumbai killed at least 17 people last night. The attack was the deadliest terrorist strike since 2008, when a siege by 10 gunmen derailed peace talks with Pakistan. Losses in regional equity markets were capped by gains in mining companies. Korea Zinc Co. jumped 5.1 percent and Newcrest Mining Ltd. (NCM) rallied 1.6 percent each after gold for immediate delivery reached a record $1,589.80 an ounce. Bullion was last 0.1 percent higher at $1,583.45. Cash silver was at $38.12 an ounce, little changed after yesterday’s 5.7 percent jump. Copper for delivery in three months on the London Metal Exchange gained as much as 0.5 percent to $9,695 a ton. Oil for August delivery fell 0.5 percent to $97.57 a barrel on the New York Mercantile Exchange, snapping a two-day rally. To contact the reporters on this story: Shiyin Chen in Singapore at schen37@bloomberg.net; Yudith Ho in Singapore at yho29@bloomberg.net To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net.

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