The euro declined against the dollar, halting a two-day advance, as divisions emerged over how to tackle Europe’s debt crisis before finance ministers meet in Brussels tomorrow. Demand for the 17-nation currency was limited as a split between France and Germany over Europe’s rescue strategy surfaced and the head of Finland’s parliament finance committee said plans to boost the region’s rescue fund through leverage disguise potential costs. Australia’s dollar fell as Asian stocks dropped, damping demand for higher-yielding assets. Those expecting “that something big will be unveiled will be disappointed quite soon, and we want to trade that disappointment,” said Imre Speizer, a strategist in Auckland at Westpac Banking Corp., Australia’s second-largest lender. “We’re using bounces in various risk markets to go short on currencies like the euro and Australian dollar.” The euro fell 0.2 percent to $1.3728 and slid 0.3 percent to 105.35 yen as of 11:47 a.m. in Tokyo. It traded at 87.22 pence from 87.23 pence yesterday, when it fell 0.3 percent. The dollar was little changed at 76.74 yen. Finance chiefs from the Group of 20 nations have urged Europe’s leaders to act “decisively” to resolve the debt crisis at an Oct. 23 summit. French President Nicolas Sarkozy flew to Frankfurt yesterday for a meeting with German Chancellor Angela Merkel, European Central Bank President Jean-Claude Trichet and International Monetary Fund Managing Director Christine Lagarde. ECB Role A Franco-German split on the role of the ECB in leveraging the euro bailout fund emerged in Frankfurt, where officials were gathered to mark the conclusion of Trichet’s term as ECB president. The disagreements among policy makers came as banks lobbied against forced recapitalization and deeper writedowns on Greek debt. Europe’s leaders are groping for ways to maximize the firepower of the 440 billion-euro ($605.5 billion) European Financial Stability Facility as the region’s debt crisis threatens to engulf Italy and Spain. Boosting the fund “would be extremely difficult,” Kimmo Sasi, who heads Finland’s parliament finance committee and advises lawmakers how to vote on European rescue policy, said in an interview. Lawmakers “aren’t willing to hand over more cash” and are “very critical of new support mechanisms,” he said. Falling Confidence Lawmakers in Finland, which threatened to delay Greece’s second bailout over collateral demands, would need to vote on any change to the EFSF. Sasi said such a bill wouldn’t pass easily through the country’s legislature. European consumer confidence weakened in October, a report is forecast to show today. An index of household sentiment in the euro area fell to minus 20 from minus 19.1 in September, the Brussels-based European Commission is projected to say, according to economists surveyed by Bloomberg News. That would be the lowest reading since August 2009. Australia’s dollar held a decline from yesterday against the U.S. currency and yen as the MSCI Asia Pacific Index of stocks dropped 1.1 percent following a 1.3 percent slide in the Standard & Poor’s 500 Index yesterday. “The bias is for the markets to lean toward a risk-off mood again after the meeting” in Europe, said Junya Tanase, chief currency strategist at JPMorgan in Tokyo. Australia’s currency traded at $1.0214 from $1.0224 yesterday, when it declined 0.4 percent. It fetched 78.44 yen after dropping 0.4 percent to 78.53 in New York. 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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