The dollar fell to a four-month low against the euro after Eric Rosengren, president of the Federal Reserve Bank of Boston, said America’s recovery may be “slow” and Standard & Poor’s threat to strip Britain’s AAA debt rating stoked concern that U.S. bonds may also be downgraded. Stocks in Europe erased declines from earlier in the day as commodity producers climbed with oil and metals. U.S. futures rose after Sears Holdings Corp. reported an unexpected profit. Asian stocks fell after Lenovo Group Ltd. posted a wider-than- estimated loss. The dollar declined 0.5 percent against the euro and 0.4 percent to the lowest in nine weeks versus the yen as of 11:38 a.m. in London. The MSCI Asia Pacific Index slipped 0.1 percent and Europe’s Stoxx 600 Index was up 0.2 percent. Futures on the Standard & Poor’s 500 Index gained 0.6 percent. The pound weakened against all but three of the 16 major currencies after S&P lowered the outlook on the U.K.’s AAA rating yesterday to “negative” from “stable,” citing the nation’s slowing economy and growing debt burden. Governments around the world are selling more bonds than ever to battle the worst recession since World War II. The U.S. Treasury will auction about $101 billion of securities next week, and Goldman Sachs Group Inc. estimates the government will sell a total of $3.25 trillion in debt this fiscal year to finance President Barack Obama’s economic stimulus measures. ‘Triple Whammy’ “Speculation has increased that the U.S. could potentially face a credit rating downgrade and in doing so, lose its AAA rating,” Lee Hardman, a foreign-exchange strategist at Bank of Tokyo-Mitsubishi UFJ Ltd., wrote in an e-mailed report today. Investors in U.S. assets may face a “triple whammy of falling U.S. equities, U.S. government debt and the dollar,” he said. Crude oil for July delivery rose 41 cents to $61.46 a barrel on the New York Mercantile Exchange. Wholesale gasoline futures for June were up 0.5 percent at $1.8085 a gallon. Memorial Day on May 25 marks the start of the U.S. summer driving season and some 32 million Americans will travel more than 50 miles from home over the three-day holiday weekend, according to the AAA motoring organization. Copper for delivery in three months rose 2.7 percent to $4,590 a metric ton on the London Metal Exchange after China, the world’s biggest consumer, said imports increased 7 percent last month. The metal is still 49 percent below the record $8,940 reached July 2. The U.S. economy will contract 2.8 percent this year, while the euro zone will shrink 4.1 percent, according to as many as 61 economists surveyed by Bloomberg. Geithner Commitment Treasuries rose, with the yield on the 10-year note falling one basis point to 3.35 percent, bring the decline this week to 22 basis points. Rosengren said in a speech in Worcester, Massachusetts, yesterday that “a rather slow recovery is likely” this year. Treasury Secretary Timothy Geithner committed to cutting the budget deficit to about 3 percent of gross domestic product, from a projected 12.9 percent this year. “It’s very important that this Congress and this president put in place policies that will bring those deficits down to a sustainable level over the medium term,” Geithner said in an interview with Bloomberg Television yesterday. The difference in yield between two- and 10-year notes was 250 basis points, near the widest level since November. Gross Concern “The markets are beginning to anticipate the possibility of” a downgrade to the U.S.’s top rating, though “it’s certainly nothing that’s going to happen overnight,” Bill Gross, the co-chief investment officer of Newport Beach, California-based Pacific Investment Management Co., said in an interview on Bloomberg Television yesterday. The firm manages the world’s biggest bond fund, the $150 billion Pimco Total Return Fund. Britain would be the fifth western European nation to have its credit grade lowered this year as the financial turmoil batters the global economy. S&P said yesterday the nation had a one in three chance of a ratings cut as debt approaches 100 percent of GDP. The pound weakened 0.5 percent against the euro and 0.4 percent versus the yen. It was little changed against the dollar. Lenovo, China’s biggest maker of personal computers, slid 6.4 percent in Hong Kong. The maker of Thinkpad laptops, based near Raleigh, North Carolina, posted a record quarterly loss and said it faces a “very challenging” market British Airways slid 2.1 percent after reporting its first full-year loss since 2002. The London-based carrier had a net loss of 375 million pounds ($594.5 million), compared with the 312 million-pound loss predicted by eight analysts in a Bloomberg survey. Profits Drop Profits at the 318 companies in Europe’s Stoxx 600 that have reported earnings since April 7 dropped 47 percent, according to data compiled by Bloomberg. That compares with a 35 percent decline in earnings at 464 companies in the S&P 500. London-based Anglo American Plc advanced 2.3 percent. The fourth-largest diversified mining company was raised to “buy” from “neutral” at Goldman Sachs Group Inc. and added to the firm’s “conviction buy” list. Sears Holdings, the largest U.S. department store chain, surged 19 percent in German trading. The Hoffman Estates, Illinois-based retailer had a profit excluding some items of 38 cents a share in the three months ended May 2. Six analysts predicted a loss of 87 cents, on average, according to a Bloomberg survey.

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