The dollar weakened against most of its major peers after Greek Prime Minister Lucas Papademos said progress had been made in debt-swap talks with bondholders, sapping demand for a refuge from Europe’s fiscal crisis. The Australian and New Zealand dollars gained as Asian stocks rallied, boosting the allure of higher-yielding currencies. The yen climbed to a three-month high against the dollar, spurring speculation that Japan’s government may take action to curb the currency’s advance. “We have some positive comments from the Greek prime minister,� said Jonathan Cavenagh, a currency strategist in Singapore at Westpac Banking Corp., Australia’s second-biggest lender. “There seems to be still a fair bit of optimism around the market that we’re still going to get a positive outcome,� which is reducing the appeal of the dollar. The U.S. currency dropped 0.3 percent to $1.3187 per euro as of 2:10 p.m. in Tokyo. The greenback fell as much as 0.2 percent to 76.18 yen, the lowest since Oct. 31. It also slid as much as 0.2 percent to $1.5743 per pound, the weakest since Dec. 21. The 17-nation euro climbed 0.2 percent to 100.50 yen. The euro is poised for its first monthly advance versus the dollar and the yen since October. The 17-nation currency has gained 1.7 percent versus the greenback in January and risen 0.8 percent against the yen. The Australian dollar strengthened 0.3 percent to $1.0632, while New Zealand’s currency rose 0.5 percent to 82.32 U.S. cents. The MSCI Asia Pacific Index (MXAP) of shares added 0.3 percent. Greek Debt Papademos said today he’s “strongly committed� to reaching a debt-swap agreement with Greece’s creditors. Representatives of the European Commission, the European Central Bank and the International Monetary Fund want more fiscal tightening and wage cuts from Greece, the Greek prime minister said to reporters after a European Union summit in Brussels. The dollar was set to decline against all of its 16 major counterparts this month after the Federal Reserve extended its pledge last week to keep interest rates low through at least late 2014. Chairman Ben S. Bernanke signaled on Jan. 25 that the central bank is considering a third round of asset purchases. The Fed has already purchased $2.3 trillion of debt in two rounds of so-called quantitative easing known as QE1 and QE2. U.S. Confidence The Conference Board’s index of U.S. consumer confidence probably rose to 68 this month, the highest since February 2011, according to the median estimate in a Bloomberg News survey of economists. The New York-based private research group will release the figures today. “We may see an increase in the attractiveness of U.S. dollars if the consumer confidence survey comes in better than expected,� said Kara Ordway, a foreign-exchange strategist at City Index Asia Pacific in Sydney. “It might ease speculation that QE3 might be in the pipeline.� The euro has fallen 3.5 percent over the past three months, the worst performance among 10 currencies tracked by the Bloomberg Correlation-Weighted Indexes. The yen was the biggest gainer with a 5 percent jump over the same period. The unemployment rate in the euro area is projected to have risen to 10.4 percent in December, according to a poll of economists before the European Union’s statistics office releases the data today. That would be an increase from the November level of 10.3 percent and would mark the highest jobless rate since 1998, before the shared currency was introduced. “Concern is clearly increasing about Europe,� said Marito Ueda, senior managing director in Tokyo at FX Prime Corp., a currency margin company. “The euro is likely to break the recent lows both against the dollar and yen.� The euro may fall toward $1.25 and 94 yen by the end of March, he said. To contact the reporters on this story: Mariko Ishikawa in Tokyo at mishikawa9@bloomberg.net; Masaki Kondo in Singapore at mkondo3@bloomberg.net. To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

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