The euro rose against the majority of its most-traded counterparts as Slovakian lawmakers prepared to vote on a proposal to retool the euro region’s bailout fund. The 17-nation currency erased its decline versus the dollar as U.S. stocks reversed losses on third-quarter earnings optimism. The euro rallied yesterday the most in a year after Germany and France pledged to deliver a plan to support banks. The pound weakened as U.K. manufacturing production contracted for a third month. New Zealand’s dollar fell as the nation’s budget deficit was wider than forecast. “The euro is in a waiting game for Slovakia,” said Carl Forcheski, a director on the corporate currency sales desk at Societe Generale SA in New York. “Stocks are holding on to their gains from yesterday after the German-French promise to deliver this comprehensive plan gave the market the impression that European policy makers are finally getting it.” The euro rose 0.1 percent to $1.3660 at 12:14 p.m. in New York after falling 0.6 percent earlier today and climbing 2 percent yesterday in the biggest gain since July 2010. The shared currency reached $1.3699 yesterday, the highest level since Sept. 21. The euro gained 0.2 percent to 104.80 yen today. The dollar was little changed at 76.72 yen. South Korea’s won was the best performer against the dollar among the most-traded currencies, rising as much as 0.9 percent to a two-week high of 1,160.80. Korean Reserves More than $300 billion of foreign-exchange reserves will help the nation weather market volatility, the Dong-A Ilbo newspaper reported, citing Benjamin Hung, chief executive officer of Standard Chartered Plc’s Hong Kong unit. The New Zealand dollar slid 0.5 percent to 77.99 U.S. cents after government financial statements showed the budget deficit widened to a record NZ$18.4 billion ($14 billion) in the year through June, from a NZ$16.7 billion estimate in the May budget. Sterling fell for the first time in three days versus the dollar, dropping 0.5 percent to $1.5598 after a report showed Britain’s manufacturing fell in August more than forecast. Factory output decreased 0.3 percent from July, when it slid a revised 0.2 percent, the Office for National Statistics said. The median forecast of 24 economists in a Bloomberg News survey was for a drop of 0.2 percent. Overall industrial output, which includes mining and oil and gas, rose 0.2 percent. “Attention is once again returning to U.K. fundamentals, and the outlook is not encouraging,” said Elizabeth Gregory, a market strategist in Geneva at Swissquote Bank SA, a unit of the financial and trading-services company Swissquote Group. Dollar Index The Dollar Index fell less than 0.1 percent to 77.587 after yesterday’s 1.4 percent decline, the biggest loss on a closing basis since July 13. IntercontinentalExchange Inc.’s gauge, used to track the greenback against the currencies of six major U.S. trading partners, is weighted 57.6 percent to the euro. The Standard & Poor’s 500 Index gained 0.2 percent after falling 0.6 percent earlier today and rallying 3.4 percent yesterday. Alco Inc. reports its earnings after the U.S. stock market closes, signaling the start of the earnings season. The S&P GSCI Total Return Index of 24 commodities advanced for a fifth day, rising 0.9 percent. “The euro zone, until we get into earnings season, is going to give the market direction,” said Fabian Eliasson, head of U.S. currency sales at Mizuho Financial Group Inc. in New York. “There is a lot of local jawboning that is going around, and people have their own agendas, causing volatility.” Slovakia may approve the euro region’s retooled bailout fund after a political storm that will probably topple Prime Minister Iveta Radicova’s governing coalition. Slovakia Opposition The nation’s largest opposition party, which pledged to reject the motion today, will back the revamped European Financial Stability Facility in a second vote if lawmakers fail to approve it, Robert Fico, the group’s leader, told reporters in Bratislava. That would give the measure a majority. There is no date set for a repeat vote. The nation is the only member of the euro area that hasn’t ratified the measure, following approval in Malta yesterday. European Union and International Monetary Fund officials indicated that Greece will get an 8 billion-euro ($11 billion) loan next month under a 110 billion-euro bailout. Two days ago, Germany and France set the Nov. 3 meeting of the Group of 20 as a deadline for a breakthrough in handling Europe’s debt crisis. To contact the reporters on this story: Allison Bennett in New York at abennett23@bloomberg.net; Emma Charlton in London at echarlton1@bloomberg.net To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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