The dollar fell to a seven-week low as the yen strengthened and falling Treasury yields boosted demand for emerging-market currencies. European stocks pared declines in the worst week in more than two months. The Bloomberg Spot Dollar Index fell 0.1 percent to 1,006.53 at 9:44 a.m. London time and touched 1,005.67, the lowest since May 9. The yen appreciated 0.3 percent to 101.41 per dollar and Russia’s ruble and South Korea’s won both gained 0.3 percent. The 10-year Treasury yield touched 2.51 percent, the least since June 2. The Stoxx Europe 600 Index rose 0.2 percent, while Standard & Poor’s 500 Index futures slipped less than 0.1 percent. Copper climbed to a three-month high. Treasuries rallied this week, sending the 10-year yield to a three-week low after data showed the U.S. economy shrank more than analysts predicted and consumer spending rose less than estimated. A report on consumer confidence is due today. Core inflation (JNCPIXFF) in Japan climbed 3.4 percent last month, the most since 1982, reducing the need for further central bank stimulus. “The dollar has come under pressure and that’s a function of the yields coming back down,� said Ian Stannard, head of European currency strategy at Morgan Stanley in London. “It gives a little bit more breathing space to the carry trade.� The U.S. currency depreciated 0.1 percent to $1.3624 per euro, set for a 0.2 percent weekly decline. It touched its weakest level since 2011 against the New Zealand dollar today and the lowest since August 2008 versus South Korea’s won. The ruble gained 0.2 percent after climbing as much as 0.5 percent against the dollar to a five-month high. European Stocks Three shares rose on the Stoxx 600 for every two that fell. The gauge is heading for a weekly retreat of 1.6 percent. Mediaset SpA gained 4.8 percent after Exane BNP Paribas upgraded the Italian broadcaster controlled by former Prime Minister Silvio Berlusconi to neutral from a rating similar to sell. Ophir Energy Plc fell 3.7 percent. UBS AG cut the oil explorer to neutral from buy, citing the company’s failure to find reserves in an offshore Gabon field. Imagination Technologies Group Plc tumbled 7.5 percent. Intel Corp. sold 25 million shares, or a 9.3 percent stake, at 205 pence apiece for a value of 51.25 million pounds ($87.3 million). The S&P 500 slipped 0.1 percent yesterday. Federal Reserve Bank of St. Louis President James Bullard predicted that the central bank’s first interest-rate rise will happen in the first quarter of next year as unemployment falls and inflation quickens. ‘Timely Warning’ Bullard’s comments are “a timely warning that the time for the Fed to start raising interest rates is drawing nearer,� Stephen Halmarick, head of investment markets research at Colonial First State Global Asset Management, which oversees about $160 billion, said by phone from Sydney. “I don’t think that risk is factored into the market sufficiently.� European bonds fell amid signs of higher German inflation. Spain’s 10-year yield rose three basis points, or 0.03 percentage point, to 2.67 percent. The rate on similar-maturity German debt increased one basis point to 1.26 percent. Inflation data from four German states showed consumer prices rose in June from the previous month, after dropping in May. Copper climbed as much as 0.4 percent to $6,983.75 a metric ton, the highest since March 6. Stockpiles in warehouse monitored by the London Metal Exchange have dropped 58 percent this year and are at the lowest since August 2008. To contact the reporters on this story: Nick Gentle in Hong Kong at ngentle2@bloomberg.net; Stephen Kirkland in London at skirkland@bloomberg.net To contact the editors responsible for this story: Stuart Wallace at swallace6@bloomberg.net Stephen Kirkland

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