June 13 (Bloomberg) -- The euro strengthened for a second day against the dollar as speculation increased Greece may seek to modify its austerity program following the June 17 election in a bid to remain in the monetary bloc. The 17-nation currency also rose versus the yen as U.S. retail sales fell in May for a second month, a sign the world's largest economy is cooling. The Greek government, independent of the electoral outcome, will seek amendments to the terms of the bailout, the Financial Times Deutschland reported. Sweden's krona advanced even as the nation unexpectedly raised its bond- sales target for a second time this year. "I don't think there's enough uncertainty in the market to push the euro down dramatically this week," said Carl Forcheski, a director on the corporate currency sales desk at Societe Generale SA in New York. "The euro has priced in this crisis, so we've made the big adjustment. I don't think we'll see it fall significantly lower until we get a clear view on the election." The euro advanced 0.3 percent to $1.2541 at 8:35 a.m. New York time, after gaining 0.2 percent yesterday. The shared currency appreciated 0.4 percent to 99.78 yen. The dollar was little changed at 79.55 yen. The euro has fallen 3.6 percent in the past six months, the worst performance among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. New Zealand's dollar rose the most in the period, advancing 4 percent. European Talks European leaders may consider relaxing Greece's austerity program after election, the Financial Times edition reported without citing anyone. Greeks vote again after an inconclusive election on May 6. In the final polls before this week's vote, one by Kapa SA showed New Democracy retaining its lead over Syriza, with the support of 26.1 percent of 1,012 Greeks surveyed. Syriza had 23.6 percent. That poll showed that Syriza gained 3.5 percentage points in a week, compared with less than a percentage point for New Democracy. Syriza leader Alexis Tsipras wrote in the Financial Times that his party is committed to keeping the country in the euro area and will seek to amend a bailout agreement the nation signed in March with the European Union and the International Monetary Fund. "Markets are very uncertain," said Peter Rosenstreich, the chief currency analysts at Swissquote Bank SA. "When it becomes a coin toss, and there is the possibility of significant price action in either direction, traders are likely to look for a neutral position. It doesn't take much to push the euro up in this market condition." Italian Auction Italy sold 6.5 billion euros of 364-day bills at an average yield of 3.972 percent, compared with 2.34 percent at an auction on May 11. Germany sold 10-year bonds and index-linked debt maturing in 2018. Sweden increased its nominal bond sale target to 59 billion kronor ($8.4 billion) from a March estimate of 50 billion kronor, the Swedish National Debt Office said today. The office raised next year's target to 63 billion kronor from 53 billion kronor. Strategists at banks including Nordea Bank AB and Swedbank AB had predicted a limited to no increase in debt sales. The krona strengthened 0.5 percent to 7.0399 per dollar. A 0.2 percent decrease in U.S. retail sales followed a similar decline in April that was previously reported as a gain, Commerce Department figures showed today in Washington. Last month's drop matched the median forecast of 79 economists surveyed by Bloomberg News. Wholesale prices in the U.S. dropped in May by the most since July 2009 as costs of energy and food decreased, easing pressure on companies to pass expenses to customers. The producer price index fell 1 percent, more than forecast, following a 0.2 percent decrease the prior month, Labor Department figures showed today in Washington. Economists projected a 0.6 percent decline, according to the median estimate in a Bloomberg News survey. --Editors: Paul Cox To contact the reporters on this story: Catarina Saraiva in New York at asaraiva5@bloomberg.net; Anchalee Worrachate in London at aworrachate@bloomberg.net To contact the editor responsible for this story: Dave Liedtka at Dliedtka@bloomberg.net

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