The euro rose for a fourth day versus the dollar and yen on bets an agreement to rescue Irish banks will prevent contagion across the region’s debt markets. The common currency reached a one-week high versus the greenback after European Union finance ministers said the deal will create a capital fund for Ireland’s lenders. New Zealand’s dollar slid after Standard & Poor’s Ratings Services revised its outlook on the nation’s foreign currency sovereign credit ratings to negative. The U.S. dollar fell before the Federal Reserve releases tomorrow minutes of this month’s meeting when policy makers decided to buy $600 billion in Treasuries. Ireland’s deal “will be of near-term relief to markets but at the end of the day it shows that the sovereign issue in the euro zone isn’t going to go away in a hurry,” said Khoon Goh, market economics and strategy head at ANZ National Bank Ltd. in Wellington. “We may well see a relief rally in the euro.” The euro rose to $1.3745 as of 6:58 a.m. in London from $1.3673 in New York on Nov. 19 and touched $1.3768, the most since Nov. 12. The single currency gained 0.4 percent to 114.70 yen. The dollar fell to 83.46 yen from 83.55 yen. New Zealand’s currency dropped 0.7 percent to 77.33 U.S. cents. Ireland’s request for a bailout makes it the second euro member to seek a rescue from the EU and the International Monetary Fund. The European Central Bank said in a statement yesterday that it is “confident” the program will help ensure the stability of the nation’s banking system. The MSCI Asia Pacific index of shares rose 0.6 percent. ‘Next Few Weeks’ Irish Prime Minister Brian Cowen said yesterday he expects talks on the package to be completed in the “next few weeks.” Finance Minister Brian Lenihan said the loan will be less than 100 billion euros ($137 billion), though he refused to give any further details at a press conference in Dublin yesterday. “A small sovereign like Ireland faced with an outsized problem that we have in our banking sector, cannot on its own address all those problems,” Lenihan said. Ireland may not draw down the entire loan, he said. The greenback fell versus 13 of its 16 most-traded counterparts before the Fed releases minutes of this month’s Federal Open Market Committee meeting. Fed Chairman Ben S. Bernanke said Nov. 19 that the use of securities purchases for monetary policy affects asset prices “quite significantly.” Disinflation Concerns U.S. inflation has slowed since the most recent recession began in 2007, and “further disinflation could hinder the recovery,” Bernanke said. “Insufficiently supportive policies in the advanced economies could undermine the recovery not only in those economies, but for the world as a whole.” Bernanke’s “very strong language” will help kick off a decline in the dollar as unemployment and deflation pressures give the Fed a mandate to keep easing measures in place, Todd Elmer, a Singapore-based currency strategist at Citigroup Inc., said on Bloomberg Television. “There is plenty of breathing room for the Fed to maintain its very accommodative stance,” Elmer said. Housing, the industry that triggered the worst recession in seven decades, is still struggling to recover. The median forecast of 57 economists projected a report from the National Association of Realtors on Nov. 23 will show purchases of previously sold houses fell 1.1 percent to a 4.48 million annual pace last month. Europe Slowing Gains in the euro were limited amid concern other nations including Portugal remain vulnerable and fiscal austerity measures will slow the region’s growth. A composite index based on a survey of euro-area purchasing managers in both industries slipped to 53.6 this month from 53.8 in October, according to the median forecast of economists surveyed before tomorrow’s report from London-based Markit Economics. A reading above 50 indicates expansion. “It’s going to take many, many years for the fiscal issues of certain eurozone countries to be resolved,” said Gareth Berry, a currency strategist in Singapore at UBS AG. “We’re quite bearish on the euro as these problems are not going to go away overnight.” UBS recommends investors sell the single currency targeting a drop toward $1.25 by end-January, Berry said. The median forecast of economists polled by Bloomberg News is for the euro to trade at $1.37 in the first quarter of 2011. The so-called kiwi dollar slid against all its major counterparts after S&P revised its outlook on the foreign currency sovereign credit ratings of New Zealand to negative from stable. The ‘AA+’ long-term and ‘A-1+’ short-term sovereign credit ratings were affirmed. To contact the reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

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