The euro declined as Moody’s Investors Service cut Italy’s bond rating before the nation sells debt today, adding to investor concern that the currency region is failing to contain its sovereign crisis. The 17-member currency traded 0.3 percent from the weakest level in six weeks against the yen after the ratings company lowered Italy’s government bond grade by two levels, citing its “weaker growth and higher unemployment� and risks to market funding. The Japanese currency was set for a weekly advance as signs global growth is slowing boosted demand for haven assets. “Italy’s downgrade brings the market’s attention back to the risks surrounding the European debt crisis,� said Kengo Suzuki, a foreign-exchange strategist in Tokyo at Mizuho Securities Co., a unit of Japan’s third-largest bank by market value. “The euro will continue to decline.� The euro fell 0.1 percent to 96.71 yen at 9:28 a.m. London time, after yesterday reaching 96.43, the weakest level since June 1. It was little changed at $1.2197 after sliding as much as 0.2 percent. The 17-nation currency fell to $1.2167 yesterday, the least since June 2010. It’s headed for a 0.8 percent drop this week. The yen traded at 79.29 per dollar, poised for a 0.5 percent weekly gain. To contact the reporter on this story: Lucy Meakin in London at lmeakin1@bloomberg.net. To contact the editors responsible for this story: Daniel Tilles at dtilles@bloomberg.net.

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