By David Merritt April 13 (Bloomberg) -- The euro snapped five days of gains against the dollar and Greece’s bonds tumbled on concern the European Union-led bailout for the nation isn’t enough to prevent the region’s debt crisis spreading. The euro fell against 15 of its most-active counterparts, losing 0.6 percent against the dollar at 10:15 a.m. in London. The premium demanded by investors to hold Greek 10-year notes instead of benchmark German securities increased to more than 400 basis points for the first time since the EU announced support for the nation on April 11. Futures on the Standard & Poor’s 500 Index slipped 0.2 percent after the benchmark gauge yesterday posted its biggest gain in six weeks. Investors are betting Greece won’t be able to avoid having to tap the 45 billion-euro ($61 billion) rescue fund pledged by governments and the International Monetary Fund to avert a default. The euro has fallen about 5 percent against the dollar this year on concern Europe’s fiscal crisis will undermine the credibility of the 16-nation currency. “The market is still very much in doubt about the success of the EU bailout plan and that’s putting the euro under pressure,” said Ulrich Leuchtmann, head of foreign-exchange strategy at Commerzbank AG in Frankfurt. “It’s far from clear if the plan simply delays or solves Greece’s problems.” Stocks fell in Europe, erasing earlier gains that were spurred by better-than-forecast economic growth in China. The Stoxx Europe 600 Index slid 0.1 percent from a 19-month high, while the MSCI Asia Pacific Index climbed 0.6 percent. Greek Yield The Athens Stock Exchange General Index lost 0.9 percent and the yield on Greek two-year notes rose 27 basis points to 7.26 percent. The yield soared to 7.83 percent on April 8, the highest since the euro’s debut in 1999, according to Bloomberg generic prices. Finance ministers said on April 11 the EU will provide Greece with 30 billion euros of three-year loans at an interest rate of about 5 percent if the nation requests the cash. The IMF would provide another 15 billion euros. The agreement came after earlier pledges failed to convince investors that the government is able to narrow a budget deficit that is more than four times the EU’s limit. The MSCI World Index of 23 developed nations’ stocks dropped 0.1 percent from a 19-month high. In Asia, Japan’s Nikkei 225 Stock Average rose 0.6 percent after Bank of Japan Governor Masaaki Shirakawa said concern Japan may slip back into recession has “pretty much gone.” Yuan Revaluation Hong Kong’s Hang Seng Index increased 0.5 percent after China’s economy grew 11.9 percent in the first quarter, the fastest pace in almost three years, according to the statistics bureau in Beijing. The pace of growth was higher than the 11.7 percent estimate in a Bloomberg survey of 24 economists. Aluminum Corp. of China Ltd. gained 2.9 percent in Hong Kong. China’s booming economy may enable the government to let the yuan strengthen without curbing exports, a move that would spur the nation’s ability to buy raw materials from Brazilian iron ore to Malaysian palm oil. The country may revalue the currency by as much as 5 percent as early as next week, Jim O’Neill, chief global economist for Goldman Sachs Group Inc., said in an interview yesterday. Singapore let its currency appreciate yesterday after its economy expanded an annualized 32.1 percent in the first quarter. The decline in U.S. futures indicated the S&P 500 may pare some of yesterday’s 1.1 percent surge, its biggest gain since March 1 and the first day the index exceeded 1,200 since September 2008. Reports today may show U.S. industrial production accelerated in March as manufacturers continued to spearhead the recovery. Toshiba Corp., which gets 17 percent of its revenue in North America, rose 3 percent as JPMorgan Chase & Co. and United Parcel Service Inc. reported better-than- estimated profit. To contact the reporter on this story: David Merritt in London on dmerritt1@bloomberg.net.

Source