The euro dropped from the highest level in almost three weeks against the dollar as Slovakian lawmakers prepared to vote on a proposal to retool the euro region’s bailout fund. The dollar rose against most of its major counterparts as falling stocks and commodities stoked demand for the most liquid assets. The pound weakened as U.K. manufacturing production contracted for a third month. New Zealand’s dollar fell after financial statements showed the nation’s budget deficit was wider than forecast. The 17-nation euro slumped even as a European Union, International Monetary Fund and European Central Bank team approved the next tranche of aid to Greece. “We are seeing a bit of correction in the euro after yesterday’s move up,” said Chris Walker, a currency strategist at UBS AG in London. “There are some concerns about the Slovakian vote. While the bottom line is that they will eventually approve it, it might be delayed, and that creates more uncertainty.” The euro fell 0.4 percent to $1.3585 at 9:08 a.m. in New York after rising 2 percent yesterday in the biggest gain since July 2010. The shared currency reached $1.3699 yesterday, the highest level since Sept. 21. The euro dropped 0.5 percent to 104.10 yen today. The dollar was little changed at 76.66 yen. South Korea’s won was the best performer against the dollar among the most-traded currencies, rising as much as 0.9 percent to a two-week high of 1,160.80. South Korean Reserves More than $300 billion of foreign-exchange reserves will help the nation weather market volatility, the Dong-A Ilbo newspaper reported, citing Benjamin Hung, chief executive officer of Standard Chartered Plc’s Hong Kong unit. The New Zealand dollar slid 0.8 percent to 77.80 U.S. cents as the nation’s budget deficit widened to a record NZ$18.4 billion ($14 billion) in the year through June, from a NZ$16.7 billion estimate in the May budget. Sterling slid for the first time in three days versus the dollar after a report showed Britain’s manufacturing fell in August more than economists forecast. Factory output fell 0.3 percent from July, when it slid a revised 0.2 percent, the Office for National Statistics said today in London. The median forecast of 24 economists in a Bloomberg News survey was for a drop of 0.2 percent. Overall industrial output, which includes mining and oil and gas, rose 0.2 percent. Focus on Fundamentals “Attention is once again returning to U.K. fundamentals, and the outlook is not encouraging,” said Elizabeth Gregory, a market strategist in Geneva at Swissquote Bank SA, a unit of the financial and trading-services company Swissquote Group. The pound fell 0.2 percent to $1.5638 and was little changed at 86.97 pence per euro. The Dollar Index rose 0.5 percent to 77.914 after yesterday’s 1.4 percent decline, the biggest loss on a closing basis since July 13. The IntercontinentalExchange Inc. gauge, used to track the greenback against the currencies of six major U.S. trading partners, is weighted 57.6 percent to the euro. Slovakia may approve the euro region’s retooled bailout fund after a political storm that will probably topple Prime Minister Iveta Radicova’s governing coalition. The nation’s largest opposition party, which pledged to reject the motion today, will back the revamped European Financial Stability Facility in a second vote if lawmakers fail to approve it today, Robert Fico, the group’s leader, told reporters today in the capital, Bratislava. That would give the measure a majority. Malta Approval There is no date set for a repeat vote. The nation is the only member of the euro area that hasn’t ratified the measure, following approval in Malta yesterday. European Union and International Monetary Fund officials indicated Greece will get an 8 billion-euro ($11 billion) loan next month under a 110 billion-euro bailout, as European leaders move to reopen talks on a new package that may mean deeper writedowns on Greek debt. Germany and France two days ago set as a deadline the Nov. 3 meeting of the Group of 20 for a breakthrough in handling Europe’s debt crisis after a meeting of German Chancellor Angela Merkel and French President Nicolas Sarkozy. Futures on the Standard & Poor’s 500 Index expiring in December fell 0.6 percent. The S&P GSCI Total Return Index of 24 commodities retreated for the first session in five days, falling 0.7 percent. To contact the reporters on this story: Emma Charlton in London at echarlton1@bloomberg.net; Allison Bennett in New York at abennett23@bloomberg.net To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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