By Anchalee Worrachate June 4 (Bloomberg) -- The dollar and the yen fell versus the euro as gains in stocks reduced demand for currencies perceived as a refuge. The dollar stayed near a four-year high against the 16- nation currency before a report that may show U.S. payrolls rose the most since 1983 in May. Kansas City Federal Reserve Bank President Thomas Hoenig called yesterday for an increase in the target federal funds rate to 1 percent by the end of the summer. The Stoxx Europe 600 Index climbed 0.9 percent, its fifth consecutive gain. “The market is probably being driven by risk appetite,” said Geoffrey Yu, a strategist at UBS AG in London. “Any support for the euro is likely to be short-lived. Our view is that the overall fundamentals remain supportive of the dollar.” The U.S. currency weakened to $1.2205 per euro as of 9:41 a.m. in London, from $1.2163 yesterday in New York. It appreciated to $1.2111 against the euro on June 1, the most since April 2006. The yen depreciated to 113.32 versus the euro, from 112.76. The dollar was at 92.81 yen, from 92.71. The U.S. economy added 536,000 jobs last month, the most since 1983, the Labor Department will say today in its nonfarm payrolls report, according to a Bloomberg survey of economists. Gains by the euro pared a second straight weekly decline against the dollar to 0.6 percent. The common currency was on course to snap a five-week drop versus the yen. To contact the reporters on this story: Anchalee Worrachate in London at aworrachate@hotmail.com; Yasuhiko Seki in Tokyo at yseki5@bloomberg.net.

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