The euro rose from a decade low against the yen, paring a fourth-straight weekly decline, as the Group of 20 nations pledged a “strong and coordinated” response to challenges facing the global economy. The 17-nation currency trimmed gains versus the dollar after Moody’s Investors Service downgraded the long-term deposit and senior debt ratings of eight Greek banks. Australia’s dollar climbed from its weakest level this year while New Zealand’s dollar rose from a five-month low reached yesterday as European stocks and U.S. stock-index futures advanced before meetings of the International Monetary Fund and World Bank. “The euro suffered from the dramatic risk sell-off yesterday but with things stabilizing now it’s recovered somewhat,” said Steven Saywell, head of foreign-exchange strategy for Europe at BNP Paribas SA in London. “All eyes are still on Europe and what the policy response will be. There are still a lot of uncertainties about the debt market.” The euro gained 0.5 percent to 103.15 yen at 9 a.m. in London, snapping a five-day decline and paring its weekly loss to 2.7 percent. The shared currency fell to as low as 102.22 yesterday, the weakest since 2001. It gained 0.4 percent to $1.3520 after reaching $1.3385 yesterday, the lowest since Jan. 19. The euro was still 2 percent weaker against the dollar this week. Japan’s currency was little changed at 76.28 per dollar. The Stoxx Europe 600 index of shares added 0.2 percent, paring this week’s slump to 6.4 percent. The MSCI Asia-Pacific excluding Japan index of shares was 2 percent lower, after earlier falling as much as 3.1 percent. Markets in Japan are closed for a holiday. G20 ‘Committed’ The G20 nations are “committed to a strong and coordinated international response to address the renewed challenges facing the global economy, notably from heightened downside risks from sovereign stresses, financial system fragility, market turbulence, weak economic growth and unacceptably high unemployment,” finance chiefs said in a statement released after talks in Washington. Traders sold the common currency this week on concern Europe won’t contain its debt crisis, even after Greece accelerated budget cuts to qualify for next month’s payment under a 110 billion-euro international bailout. ‘Not Encouraging’ European Central Bank Governing Council member Klaas Knot said he no longer excludes a Greek default, Het Financieele Dagblad reported, citing an interview. “I am now less definite in excluding a default bankruptcy than I was a few months ago,” Knot was cited as saying by Dagblad. “I’ve long been convinced that bankruptcy is not necessary. The news from Athens, however, is not encouraging.” The ECB may act to address risks to growth as soon as next month should economic data disappoint, Governing Council member Luc Coene said in an interview yesterday. Potential measures include the reintroduction of longer- term bank loans, with maturities of 12 months or even longer, Coene said. He added that cutting the benchmark rate “certainly would not help” in bringing down longer-term rates. The dollar and yen advanced versus most major peers this week as concern that global growth is slowing spurred demand for safer assets. “The U.S. dollar is benefiting from a flight to safety to U.S. Treasuries,” said Lee Wai Tuck, a currency strategist at Forecast in Singapore. “The dollar will benefit, and yen will benefit as well. Asian Intervention The yen appreciated 4.3 percent in the past week, the best performer among the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Currency indexes. The dollar, the second-best performer, gained 3.5 percent. The euro was boosted by speculation Asian central banks were active in foreign-exchange markets after the region’s currencies slumped this week against the dollar, said Charles Han, Hong Kong-based director of foreign-exchange trading at Newedge Financial HK Ltd. ‘‘Not only have they been buying euro but also, in Korea specifically, they’ve been selling dollars to help smooth volatility,” Han said. South Korea’s won headed for its worst week in 16 months, prompting authorities to say they will intervene to slow the decline. The finance ministry said it will “take action” to stabilize the currency market, after holding an emergency meeting with the central bank before markets opened. “The herd behavior on one-way bets has been excessive in the recent currency market,” the ministry said. The won tumbled 5 percent this week to 1,167.31 per dollar, the biggest weekly slump since May 2010, according to data compiled by Bloomberg. To contact the reporters on this story: Garth Theunissen in London gtheunissen@bloomberg.net; Candice Zachariahs in Sydney at czachariahs2@bloomberg.net To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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