The euro fell against most of its major peers before data that may show consumer sentiment slid to a four-month low amid Europe’s debt woes. The 17-nation currency snapped a two-day advance against the dollar as European Union leaders prepare for a summit to discuss the fiscal crisis. The yen weakened for a second day as the Bank of Japan (8301) starts a two-day meeting today amid prospects it will boost stimulus measures. Demand for the New Zealand dollar was supported as Asian stocks extended a global rally. “None of the euro’s selling catalysts have been resolved,� said Masashi Murata, a currency strategist in Tokyo at Brown Brothers Harriman & Co. “Countries that are suffering from the debt crisis see their economies deteriorating in part because of spending cuts.� The euro declined 0.2 percent to $1.2796 as of 7 a.m. in London. It reached $1.2642 on May 18, the least since Jan. 16. The shared currency was little changed at 101.69 yen from 101.65 yesterday when advanced 0.7 percent. Japan’s currency weakened 0.2 percent to 79.48 per dollar from yesterday, when it depreciated 0.4 percent. New Zealand’s dollar rose 0.3 percent to 76.73 U.S. cents from yesterday. It rallied 0.5 percent to 60.98 yen. The MSCI Asia Pacific Index (MXAP) of stocks advanced 1.4 percent, following a 1.6 percent gain in the Standard & Poor’s 500 Index in New York. A gauge of household sentiment in the euro area probably dropped to minus 20.5 this month from minus 19.9 in April, according to the median economist estimate in a Bloomberg News survey before the European Commission reports the figure today. That would be the lowest level since January. EU Summit German Chancellor Angela Merkel said yesterday she won’t shy away from disagreeing with French President Francois Hollande at the EU summit beginning tomorrow in Brussels. Good cooperation “doesn’t exclude differing positions,� Merkel said in Chicago during a meeting of the North Atlantic Treaty Organization. Elsewhere in Europe, Greece is preparing for June 17 elections following an inconclusive May 6 ballot. The euro may rebound toward $1.2963, the 50 percent retracement from its high on May 1 to the low on May 18, said Jesper Bargmann, regional head of spot trading for major currencies in Singapore at Royal Bank of Scotland Group Plc. He cited Fibonacci analysis, which says that prices move by certain percentages after reaching a new high or low. BOJ Meeting Japanese Finance Minister Jun Azumi said in Tokyo today he regards highly the steps taken by the nation’s central bank since February. The BOJ expanded its asset-purchase program in February and April. Japan probably had a trade shortfall of 470.8 billion yen ($5.9 billion) last month after a revised deficit of 84.5 billion yen in March, according to the median estimate in a Bloomberg survey before the data tomorrow. “As long as deflation continues, pressure on the BOJ to expand monetary easing won’t end,� said Daisaku Ueno, a senior foreign-exchange and fixed-income strategist at Mitsubishi UFJ Morgan Stanley Securities Co. in Tokyo., a unit of Japan’s biggest-listed bank. “Japan’s trade deficit has been probably priced in, but there are likely to be people who sell the yen on that if markets are tilted toward yen weakness.� The yen has weakened 2 percent in the past six months against the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The euro has fallen 4.5 percent while the dollar has gained 1.5 percent. 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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