The euro fell, snapping two days of gains against the dollar, as European Union officials struggled to break a deadlock on a second Greek rescue plan. Australia’s dollar held onto three days of gains after central bank Governor Glenn Stevens reiterated that policy makers will need to raise interest rates at some stage. Demand for the greenback was limited before U.S. reports forecast to show inflation slowed and confidence among homebuilders remained weak. Taiwan’s currency gained on speculation its central bank will raise interest rates to fight inflation. “There are still worries over Greece, given uncertainty about how it can avoid a credit event such as a default,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo. “Financial damage could be widespread. It’s a reason to sell the euro.” The euro declined to $1.4414 at 1:20 p.m. in Tokyo from $1.4440 in New York yesterday. The currency fell to 115.97 yen from 116.23. Japan’s currency traded at 80.45 per dollar from 80.49, after reaching 80.69 on June 13, the lowest level since June 3. Taiwan’s dollar rose 0.1 percent to NT$28.829 against its U.S. counterpart. Greece’s Debt Crisis The euro has depreciated 0.8 percent in the past week against nine other currencies of developed economies, according to Bloomberg Correlation-Weighted Currency Indexes. The yen has fallen 0.3 percent and the dollar has risen 0.5 percent. German Chancellor Angela Merkel and French President Nicolas Sarkozy will meet on June 17 in Berlin, with pressure mounting for the leaders to resolve their differences over a rescue for Greece, which was downgraded this week to the world’s lowest credit rating by Standard & Poor’s. EU finance ministers yesterday agreed to convene again on June 19 after they failed to reconcile a German-led push for bondholders to share part of the cost of a new Greek aid plan. European Central Bank warnings were backed by France that the move might constitute the region’s first sovereign default. ECB policy makers have warned against German proposals for extending Greek bond maturities for seven years, which rating companies have said would be considered a default. ECB President Jean-Claude Trichet, who attended yesterday’s meeting, said on June 9 that governments were flirting with what may be a “enormous mistake.” RBA Rates Australia’s dollar reversed earlier losses after Reserve Bank of Australia Governor Stevens signaled inflation data next month may be key for the timing of an interest-rate increase. “New information will, as always, be important in our monthly assessments of what monetary policy needs to do,” Stevens said in prepared remarks today in Brisbane, the capital of Queensland state. “As far as prices are concerned, we will get another comprehensive round of data in late July.” The so-called Aussie rose 0.2 percent to $1.0704 after falling as much as 0.3 percent earlier. It traded at 86.11 yen from 86 yen. Gains in the U.S. dollar were curbed on prospects growth is moderating in the world’s largest economy, underpinning evidence for the Federal Reserve to keep interest rates near zero. The consumer-price index increased 0.1 percent in May, after a 0.4 percent gain in April, according to a Bloomberg News survey of economists before today’s report. The National Association of Home Builders/Wells Fargo sentiment index held at 16 this month, a separate Bloomberg survey showed before the Washington-based group releases the data today. U.S. Economy “If there’s any sign that CPI is weakening a little bit, that would probably be dollar negative,” said Gareth Berry, a foreign exchange strategist at UBS AG in Singapore. “Some in the market might interpret a weak CPI as giving the Fed increased room to maneuver if they wanted to see more quantitative easing sometime down the road.” The Fed’s $600 billion program of buying Treasuries stimulate the economy is ending this month. Taiwan’s dollar gained for a second day after China increased the reserve-requirement ratio for banks, spurring speculation the island’s policy makers will raise borrowing costs this month to curb inflation. The People’s Bank of China lifted the amount of cash lenders must set aside as reserves yesterday for a sixth time this year after a government report showed consumer prices rose 5.5 percent in May from a year earlier. Taiwan’s inflation accelerated to 1.66 percent last month, the fastest pace since February 2010, official data showed on June 7. “China’s tightening move supports the idea Taiwan will raise rates to rein in prices too at the end of this month,” said Henry Lin, a foreign-exchange trader at Taiwan Shin Kong Commercial Bank in Taipei. “That supports the Taiwan dollar.” To contact the reporters on this story: Ron Harui in Singapore at rharui@bloomberg.net; Kristine Aquino in Singapore at kaquino1@bloomberg.net To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

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