The euro weakened against the dollar and depreciated to less than 1.10 Swiss francs for the first time as surging bond yields in Italy reawakened concern that the region’s debt crisis will worsen as global growth slows. The 17-nation European currency fell to the lowest level against the dollar since July 21 and had its longest losing streak versus the yen in almost three months. Italy’s 10-year yield jumped to the most since 1997. The franc climbed against all 16 of its major peers tracked by Bloomberg as reports showed Swiss retail sales jumped and manufacturing growth unexpectedly accelerated. The Australian dollar dropped after the nation’s central bank kept its main interest rate unchanged. “The market is becoming nervous about Italy again” and pushing the euro lower, said Sara Yates, a foreign-exchange strategist at Barclays Plc. “It’s fair to say global growth prospects look less certain than they did.” The euro declined 0.3 percent to $1.4202 as of 9:24 a.m. in London after depreciating to $1.4161. It weakened 0.1 percent versus the yen to 109.82. It has dropped in each of the past five days against its Japanese peer, the longest run of declines since May 9. The euro slid as much as 1.6 percent to 1.09877 Swiss francs, a record low. Losses by Italian 10-year bonds pushed yields up to a euro- era record versus benchmark German bunds. Spanish bonds also slumped before sales this week of 2014 and 2015 securities. Franc Records European producer-price inflation slowed to 5.9 percent from 6.2 percent in May, according to the median of 20 economists surveyed by Bloomberg News before today’s data, strengthening the case for the European Central Bank to keep interest rates unchanged. The franc climbed the most against the Australian and New Zealand dollars among the major currencies today. It reached records versus the euro, dollar and the pound yesterday. Swiss retail sales, adjusted for inflation, rose 7.4 percent in June from a year earlier after falling a revised 3.9 percent in the previous month, the Swiss government said today. The Purchasing Managers’ Index increased to 53.5 in July from 53.4 in the previous month when adjusted for seasonal effects, Zurich-based Credit Suisse Group AG said today. Economists forecast the gauge would fall to 52.5, the median of 11 forecasts in a Bloomberg News survey shows. Japan’s currency was 0.1 percent weaker at 77.31 yen per dollar. Finance Minister Yoshihiko Noda said the nation’s currency is overvalued and he’s watching markets closely. Australia’s dollar slid 0.7 percent to $1.0896. Reserve Bank of Australia Governor Glenn Stevens held the overnight cash-rate target at 4.75 percent in Sydney for a record eighth straight meeting, saying “the board remains concerned about the medium-term outlook for inflation.” He cited “the acute sense of uncertainty” in financial markets as a factor for inaction. To contact the reporter on this story: Lukanyo Mnyanda in Edinburgh at lmnyanda@bloomberg.net To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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