By Lukanyo Mnyanda Nov. 25 (Bloomberg) -- The euro fell to a seven-week low against the dollar as French consumer confidence declined, adding to concern the sovereign-debt crisis is pushing the region into a recession. Europe’s common currency headed for a third weekly decline versus the yen as Italy prepared to sell bills after German Chancellor Angela Merkel yesterday rejected joint euro bonds as a way to help reduce borrowing costs across the region. Sweden’s krona weakened as regulators told the nation’s largest banks to target tougher capital standards than those set internationally. “Risk sentiment is still pretty poor as there doesn’t seem to be one clear solution that will be swift for Europe,� said Besa Deda, chief economist at St. George Bank Ltd. in Sydney. “The U.S. dollar would get some support in this environment particularly, as the euro is out of favor.� The euro fell 0.5 percent to $1.3275 at 9:38 a.m. in London, after dropping to $1.3254, the weakest since Oct. 6. It has fallen 1.9 percent against the dollar this week. The shared currency weakened 0.2 percent to 102.71 yen, having lost 1.2 percent this week. The dollar gained 0.3 percent to 77.37 yen. An index of consumer sentiment in France, the euro area’s second-largest economy, slid to 79 this month from 82 in October, according to Insee, the national statistics office. That was the lowest since February 2009. Italy Auction Italy is due to auction up to 8 billion euros of bills today as the country’s two-year yield climbed to a euro-era record 7.523 percent. The benchmark Stoxx Europe 600 Index dropped 0.5 percent. Sweden’s krona declined for a fifth day against the dollar, losing 0.6 percent to 6.9811, extending its weekly decline to 2.8 percent. It was little changed at 9.2638 against the euro. The Riksbank, the Financial Supervisory Authority and Finance Ministry want the country’s largest banks to target common equity Tier 1 capital of at least 10 percent from January 2013, with the requirement rising to 12 percent in 2015, according to a joint statement today. The nation is targeting tougher rules than those set by the Basel Committee on Banking Supervision to “create more stable banks, prevent future crises and thus reduce the risk of costs for taxpayers,� the statement said. --With assistance from Kim McLaughlin in Stockholm. Editors: Nicholas Reynolds 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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