The euro advanced to its strongest level in more than a week against the dollar before a report economists said will show German investor sentiment improved for a second month in October. Europe’s 17-nation currency strengthened for a fourth day versus the yen as the Financial Times reported that Spain has found an acceptable formula for seeking financial aid. The dollar and the yen fell against most of their major counterparts before U.S. reports that economists said will show improvement in industrial production and housing starts, damping demand for the safest assets. Federal Reserve Bank of St. Louis President James Bullard said U.S. growth will pick up next year. “You’ve got a market that’s not really prepared for the upside or risk on, so the positions that are out there are designed to hedge against euro catastrophe,� said Neil Jones, the head of European hedge-fund sales at Mizuho Corporate Bank Ltd. in London. “We are in a risk-on environment and the yen is performing poorly.� The euro added 0.5 percent to $1.3009 at 8:50 a.m. London time, after reaching $1.3013, the strongest level since Oct. 8. Against Japan’s currency, it gained 0.8 percent to 102.65. The yen slipped 0.3 percent to 78.91 per dollar. Europe’s common currency has gained 0.5 percent in the past week, the second-best performance after the Swiss franc among the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. That cut its decline this year to 2.1 percent. To contact the reporter on this story: Lukanyo Mnyanda in Edinburgh at To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net

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