The euro declined from near the strongest in a month against the dollar as traders speculated European leaders will struggle to meet a deadline for this month on a plan to stem the region’s debt crisis. The 17-nation currency pared a gain from last week, the biggest in more than two years, amid concern opposition from banks to taking bigger losses on Greek debt will hamper European leaders’ efforts to reach a breakthrough. Australia’s dollar slid before the central bank tomorrow releases minutes of an Oct. 4 meeting when policy makers signaled slowing inflation would enable them to cut interest rates if needed. Asian currencies strengthened, led by South Korea’s won. “We’re now in anticipation of maybe too much from the Europeans,” said Tim Riddell, Australia & New Zealand Banking Group Ltd.’s Singapore-based head of global markets research. “Look to buy into dips in the euro rather than chase it because we will get pockets of disappointment as we start to assess what the Europeans are genuinely capable of providing.” The euro fell 0.2 percent to $1.3854 as of 1:45 p.m. in Tokyo from $1.3882 in New York on Oct. 14, when it completed a 3.8 percent weekly advance, the biggest since March 2009. It reached $1.3894 last week, the most since Sept. 16. The shared currency declined 0.2 percent to 106.93 yen from last week. The yen was little changed at 77.20 per dollar. Group of 20 finance ministers and central bank officials concluded weekend talks in Paris endorsing parts of an emerging plan to halt the crisis. They set an Oct. 23 summit of European leaders in Brussels as the deadline for it to be delivered. G-20 leaders will meet Nov. 3-4 in Cannes, France. Euro-Area Hurdles Hurdles to overcome for an accord include resistance from bankers to a deeper restructuring of Greek debt as well as disagreements between Europe’s capitals over how to multiply the firepower of their bailout fund and recapitalize financial institutions. Greece’s parliament faces another tight vote on new fiscal measures as soon as this week, a showdown that Prime Minister George Papandreou needs to win to ease the way for more foreign financing. Europe’s plan, which has still to be made public, includes writing down Greek bonds by as much as 50 percent, establishing a backstop for banks and magnifying the strength of the 440 billion-euro ($609 billion) temporary rescue fund known as the European Financial Stability Facility, people familiar with the matter said last week. “I’d expect there to be a fair bit of dissent amongst European leaders and some of that is likely to leak out,” said Mike Burrowes, a currency strategist at Bank of New Zealand Ltd. in Wellington. “My bias for euro, kiwi, Aussie and the like is to buy dips, as we are getting closer to a package and that will see a stabilization in sentiment.” RBA Rate Bets The euro weakened 0.1 percent today according to Bloomberg Correlation-Weighted Currency Indexes, which track 10 developed- nation currencies. It has advanced 1.3 percent in the past month. The so-called Aussie snapped a three-day advance, weakening 0.4 percent to $1.0301 after last week touching $1.0346, the strongest level since Sept. 19. RBA Governor Glenn Stevens left the nation’s benchmark rate unchanged at 4.75 percent on Oct. 4 and said “an improved inflation outlook would increase the scope for monetary policy to provide some support to demand, should that prove necessary.” Traders are betting policy makers will cut the cash target by at least 25 basis points by the end of this year, cash rate futures show. China Growth “After such a big move, the Australian dollar getting a few wobbles is certainly understandable,” said Gavin Stacey, chief interest-rate strategist at Barclays Capital in Sydney. “Once you’ve had such a large move, you become more susceptible to downside surprises for any disappointment on RBA or the global policy front.” The won and other Asian currencies strengthened as international funds added to holdings of regional assets to benefit from the world’s fastest-growing economies. Global funds bought $1.5 billion more Indonesian, South Korean and Taiwanese shares than they sold last week, exchange data show. Chinese gross domestic product probably increased 9.3 percent in the third quarter from a year earlier, according to the median estimate of economists in a Bloomberg News survey before the data’s release tomorrow. That would be the ninth- straight quarter that growth exceeded 9 percent. “Sentiment and risk appetite are improving and that provides support for Asian currencies through stock buying,” said Hideki Hayashi, a researcher at the Japan Center for Economic Research in Tokyo. The won advanced 1 percent to 1,145.05 per dollar, according to data compiled by Bloomberg, and Malaysia’s ringgit gained 0.3 percent to 3.12. To contact the reporters on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net To contact the editors responsible for this story: Rocky Swift at rswift5@bloomberg.net

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