The euro traded at almost its lowest level since January against the dollar as concern lingered that Europe’s debt crisis will slow regional economic growth. The 17-nation currency pared earlier gains before Italy sells bills and bonds tomorrow. Sweden’s krona and the pound strengthened against the greenback before reports forecast to show U.S. consumer confidence and regional manufacturing gauges rose, reducing demand for haven assets. The Swiss franc and the yen also appreciated against the dollar. “The major theme going into 2012 is going to be the euro zone still,� said Mark McCormick, a currency strategist at Brown Brothers Harriman & Co. in New York. “There’s going to be some large bond supplies coming from some of the periphery countries, Italy and Spain in particular, and that’s going to be the focus.� The euro was little changed at $1.3068 at 8:52 a.m. in New York. It dropped to $1.2946 on Dec. 14, the lowest level since Jan. 11. The common currency weakened 0.1 percent to 101.71 yen. The dollar fell 0.2 percent to 77.83 yen. The krona rose the most against the greenback among the 16 major currencies tracked by Bloomberg, adding 0.3 percent to 6.8641. The pound appreciated 0.2 percent to $1.5659 and rose 0.2 percent to 83.40 pence per euro. Currency Scoreboard The shared currency has dropped 2.8 percent this month against the dollar and 2.4 percent this year. It has lost 1.4 percent this year against its nine developed-nation counterparts, according to Bloomberg Correlation-Weighted Currency Indexes. The dollar has gained 0.9 percent in the measure and the yen rose the most among the currencies, appreciating 3.9 percent. Italy is scheduled to sell 9 billion euros ($11.8 billion) of 179-day bills and as much as 2.5 billion euros of zero-coupon 2013 securities tomorrow. It will auction debt due in 2014, 2018, 2021 and 2022 the following day. Ten-year bond yields in Italy advanced six basis points, or 0.06 percentage point, to 7.04 percent, above the 7 percent level that spurred Greece, Ireland and Portugal to seek bailouts. “The markets are waiting to see how much demand there’ll be for Italian debt,� said Junichi Ishikawa, a Tokyo-based market analyst at IG Markets Securities Ltd. “If the results deepen doubts about Italy’s funding ability, they will weigh on the euro.� Consumer Mood An index of consumer confidence in the U.S. rose to 58.6 this month from 56 in November, according to the median estimate of 61 economists surveyed by Bloomberg News. The New York-based Conference Board publishes the figures today. The Federal Reserve Bank of Richmond may say the overall business activity index for the central-Atlantic region climbed to 5 in December from 0 last month, economists said. Manufacturing in Texas increased to 4.5 this month from 3.2 in A “few� Bank of Japan board members said financial-market turmoil from the European debt crisis and the yen’s appreciation were increasing risks for growth, according to a record of last month’s board meeting released today. The yen tends to gain during periods of financial stress as Japan’s export-reliant economy doesn’t need foreign capital to balance current accounts -- the broadest measure of trade. The currency has strengthened against all 16 of its most-traded peers this year, rising 4.2 percent against the dollar and 6.7 percent versus the euro. Yen Policy Japanese officials sold at least 14.3 trillion yen this year to stem gains that cut profits for exporters from Toyota Motor Corp. to Nintendo Co., and Finance Minister Jun Azumi has pledged more action. Intervention in 2012 may fail again as financial turmoil attracts investors to the world’s third-most traded currency for its low volatility. Spain’s Economy and Competition Minister Luis de Guindos said yesterday in Madrid the nation’s economy has suffered a “relapse� and will contract as the People’s Party takes over the nation’s finances from the Socialists. “The next two quarters aren’t going to be easy,� he said. Germany’s government is revising its forecast for 1 percent economic growth in 2012 and will present a lower figure in mid- January, Focus magazine reported, without citing anyone. The nation’s economy ministry denied the Focus report, saying no decision has been made. An analysis of potential growth is underway, a spokeswoman said in an e-mailed statement, declining to be identified, citing ministry policy. Futures traders cut their bets last week from a year earlier that the euro will decline against the U.S. dollar. The difference in the number of wagers by hedge funds and other large speculators on a decline in the euro compared with those on a gain -- so-called net shorts -- was 113,697 on Dec. 20., compared with 14,093 on Dec. 21, 2010. To contact the reporter on this story: Catarina Saraiva in New York at asaraiva5@bloomberg.net To contact the editor responsible for this story: Robert Burgess at bburgess@bloomberg.net

Source