The dollar fell against the euro for a second day as stocks rose on mounting optimism policy makers are moving closer to resolving a deadlock on U.S. borrowing and to finding an agreement on Europe’s debt crisis. The Dollar Index declined for a second day as the U.S. currency slid versus most of its major peers tracked by Bloomberg. French President Nicolas Sarkozy and German Chancellor Angela Merkel will meet today before European leaders seek a solution to the region’s debt woes at a summit tomorrow. South Korea’s won led gains in Asian currencies and the Singapore dollar climbed to a record as the rally in shares across the globe stoked demand for higher-yielding assets. “Hope springs eternal,” said Sebastien Galy, a senior foreign-exchange strategist at Societe Generale SA in London. “The negotiations on the debt ceiling are basically dollar positive but equities are probably going to continue to do quite well and since the main funding currency is the dollar, the net effect is going to be dollar-negative.” IntercontinentalExchange Inc.’s Dollar Index, which gauges the greenback against the currencies of six major U.S. trading partners, slid 0.2 percent to 75.055 as of 9 a.m. in London. The dollar slipped 0.2 percent to $1.4168 per euro and was 0.3 percent weaker at 78.93 yen. The euro declined 0.2 percent to 111.81 yen. The South Korean won climbed 0.4 percent to 1,055.30 against the U.S. currency, according to data compiled by Bloomberg. The Singapore dollar reached S$1.2139 against its U.S. counterpart, an all-time high, before trading at S$1.2147. The MSCI Asia Pacific Index of regional shares advanced 1.2 percent and the Stoxx Europe 600 Index rose 0.7 percent. To contact the reporters on this story: Monami Yui in Tokyo at myui1@bloomberg.net; Paul Dobson in London at pdobson2@bloomberg.net. To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net.

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