The euro strengthened against the dollar for a second week as investors reduced record bets against the currency before Greece’s June 17 election, and amid speculation central banks may provide aid to financial markets. The 17-nation currency pared earlier losses against the dollar on concern its decline since April has been overdone. Central banks are preparing for coordinated action to provide liquidity if needed after a general election in Greece in two days, Reuters reported. The dollar headed for weekly declines versus major peers as weaker U.S. growth added to the case for further monetary stimulus from the Federal Reserve. “The market has been paring back on their short euro positions,� said Michael Woolfolk, senior currency strategist in New York at Bank of New York Mellon Corp. A short is a bet the price of an asset will fall. “The market is severely short euros still. Because the uncertainty surrounding the elections, market players wish, going into the weekend, to be more neutral in their positioning.� The euro strengthened 0.1 percent to $1.2639 at 11:52 a.m. in New York, increasing its weekly gain to 1 percent. The currency fell 0.8 percent to 99.44 yen. The dollar lost 0.9 percent to 78.65 yen. To contact the reporters on this story: Catarina Saraiva in New York at asaraiva5@bloomberg.net; Joseph Ciolli in New York at jciolli@bloomberg.net To contact the editor responsible for this story: Dave Liedtka at Dliedtka@bloomberg.net

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