June 26 (Bloomberg) -- The dollar weakened and stocks pared their advance after China’s central bank reiterated a call for a “super sovereign currency” and said the country’s financial institutions face a tougher environment this year. The Dollar Index that measures the currency’s performance against six trading partners fell as much as 0.7 percent at 11:25 a.m. in London after China’s central bank also said the International Monetary Fund should manage part of members’ foreign reserves. The Dow Jones Stoxx 600 Index of European shares added 0.2 percent, trimming an advance of as much as 1.3 percent. Russia’s Micex Index gained 2 percent. China, the biggest foreign holder of U.S. Treasuries, reduced its holdings of government notes and bonds by $4.4 billion to $763.5 billion in April, according to the data released on June 15 in Washington. People’s Bank of China Governor Zhou Xiaochuan in March urged the IMF to expand the functions of its unit of account and move toward a “super- sovereign reserve currency.” “To prevent the deficiencies in the main reserve currency, there’s a need to create a new currency that’s delinked from the economies of the issuers,” the People’s Bank of China said in a review of the economy in 2008 released today. The dollar also declined as signs that the global contraction is slowing encouraged investors to buy higher- yielding currencies. The People’s Bank of China also said in its assessment of the country’s financial situation at the end of 2008 posted on its Web site today that the IMF relies on too few foreign currencies. Yen, Euro The yen also headed for a weekly loss against the euro. Japan’s benchmark interest rate is 0.1 percent and the U.S.’s is between zero and 0.25 percent, compared with 1 percent in the euro region and Norway’s 1.25 percent. Today’s gains in European stocks trimmed the Stoxx 600’s second-straight weekly drop to 1.4 percent after a three-month, 36 percent rally drove price-earnings valuations to the highest level in five years. The Organization for Economic Cooperation and Development boosted its forecast for the economy of its 30 member nations for the first time in two years this week, while a U.S. government report today may show consumer spending rose in May for the first time in three months. “Risk appetite is coming back,” Peter Redward, the head of Asian emerging-markets research at Barclays Plc in Singapore, said in an interview with Bloomberg Television. “We’re now seeing the effects of fiscal and monetary stimulus beginning to kick in and those themes are going to continue.” Stocks gained in Asia and Europe after Bridgestone Corp., the world’s largest tiremaker, narrowed its loss forecast. Bridgestone gained 8.5 percent in Tokyo, while Michelin & Cie. advanced 4.1 percent in Paris. Emerging Markets The MSCI Emerging Markets Index rose 1.6 percent. While the 22-country benchmark has dropped 1.4 percent this month, it’s headed for the best quarterly gain on record, up 34 percent since March. Lukoil, Russia’s second-biggest oil producer, advanced 2.3 percent as crude gained, while OAO GMK Norilsk Nickel, the country’s biggest mining company, added 4 percent as copper climbed 2 percent this week to $5,130.25 a metric ton on the London Metal Exchange. The Micex is recovering from a retreat this month that sent it down more than 20 percent from its June 1 peak, the world’s first benchmark equity index to enter a bear market since global stocks began rallying in March. Oil Climbs Crude oil for August delivery rose as much as $1, or 1.4 percent, to $71.23 a barrel on the New York Mercantile Exchange after Nigerian militants said they attacked a Royal Dutch Shell Plc offshore oil field late yesterday, hours after an offer of an amnesty by President Umaru Yar’Adua. New Zealand’s dollar weakened 0.3 percent versus the U.S. dollar after the nation’s statistics bureau said gross domestic product declined 1 percent in the first quarter. The median of 11 estimates in a Bloomberg News survey was for a 0.7 percent contraction. A report at 8:30 a.m. in Washington will show consumer purchases in the U.S. increased 0.3 percent after falling 0.1 percent in April, according to the median forecast of 76 economists surveyed by Bloomberg News. A U.S. report yesterday showed gross domestic product shrank last quarter at a 5.5 percent pace, slower than the 5.7 percent decrease previously estimated by the government. Futures on the Standard & Poor’s 500 Index slid 0.4 percent today after the GDP report helped send the gauge up 2.1 percent yesterday. Libor-OIS Stocks and credit markets have rebounded since the U.S. government and Federal Reserve pledged $12.8 trillion to combat the first global recession in five decades and almost $1.5 trillion in losses and writedowns at financial firms from the collapse of subprime mortgages. The Libor-OIS spread, which measures banks’ reluctance to lend, has narrowed to 38 basis points, from a record 364 basis points in October, following the collapse of Lehman Brothers Holdings Inc. Analysts covering S&P 500 companies began to boost 2009 profit estimates for the first time this year in May as economists predicted the U.S. economy will start to expand next quarter, weekly data compiled by Bloomberg show. Global market liquidity is at its strongest level since November, according to an index updated today by the Bank of England. The index, which measures market prices, including gaps between bid and offer prices, the ratio of returns to trading volumes, and spreads in the credit market, reached a low in April. Government bonds fell as demand for the safest securities waned. The yield on the 10-year Treasury rose 4 basis points to 3.58 percent and the 10-year German bund added 1 basis point to 3.43 percent. The Treasury sold a record $104 billion of securities this week to finance President Barack Obama’s stimulus of the world’s largest economy.

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