The euro reversed earlier gains versus the dollar and the yen after a German government official said the nation rejects proposals to combine current and permanent euro-area rescue funds. The Dollar Index rose for the first time in three days before European leaders gather tomorrow for a two-day summit in Brussels. Economists predict the European Central Bank will cut its benchmark interest rate at a policy meeting tomorrow. The euro weakened 0.1 percent to $1.3387 at 11:07 a.m. London time after rising as much as 0.4 percent. The 17-nation currency fell 0.1 percent to 104.06 yen. The Japanese currency was little changed at 77.74 per dollar. Germany rejects proposals to combine the current and permanent euro-area rescue funds, the government official told reporters in Berlin today on condition of anonymity because the negotiations are private. The ECB will reduce its benchmark rate to 1 percent from 1.25 percent on Dec. 8, according to the median estimate of economists surveyed by Bloomberg News. The Dollar Index, which IntercontinentalExchange Inc. uses to track the U.S. currency against those of six major trading partners, advanced 0.1 percent to 79.598. To contact the reporters on this story: Keith Jenkins in London at kjenkins3@bloomberg.net; Monami Yui in Tokyo at myui1@bloomberg.net To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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