The euro climbed to its strongest level in six weeks against the yen as Germany signaled its support for a European Central Bank approach to resolving the debt crisis that may involve buying sovereign debt. The shared currency gained versus all of its 16 major peers. German Chancellor Angela Merkel, who is to meet French President Francois Hollande and Greek Prime Minister Antonis Samaras next week, said yesterday that leaders “feel committed to do everything� to safeguard the euro. Australia’s dollar snapped a two-day advance against its U.S. counterpart as the South Pacific nation said its central bank would be able to ease monetary policy if currency gains hurt the economy. “The market is very short on the euro and any signs that the crisis is being dealt with is reflected in the� currency rising, said Henrik Gullberg, a currency strategist at Deutsche Bank AG in London. A short bet is one that a currency will weaken. “Given that Merkel was talking as well, maybe that added credibility� to reports of progress, he said. The euro advanced 0.3 percent to 98.38 yen at 10:03 a.m., the most since July 6. It added 0.2 percent to $1.2382. Japan’s currency slid 0.1 percent to 79.46 per dollar, the weakest since July 12. The so-called Aussie lost 0.6 percent to $1.0451. The euro has gained 0.6 percent against the dollar this week. The yen is down 1.4 percent versus the greenback, its biggest drop since the five days ended June 22. “Obviously time is pressing� on stamping out the debt crisis, though “on many of these issues we feel we’re on the right track,� Merkel told reporters in Ottawa yesterday at a press conference with Canadian Prime Minister Stephen Harper. The euro has lost 4.4 percent over the past three months, the worst performer alongside the Swiss franc among the 10 developed-market currencies tracked by Bloomberg Correlation- Weighted Indexes. The yen declined 1.9 percent and the dollar slid 1.6 percent. To contact the reporters on this story: Lukanyo Mnyanda in Edinburgh at lmnyanda@bloomberg.net; Sharon Chen in Singapore at schen462@bloomberg.net To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net.

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