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Euro Falls on Greek Debt Concerns; Oil Snaps Three-Day Gain

The euro fell for a second day and oil snapped a three-day gain on concern the European sovereign debt crisis is worsening amid increased efforts to cool inflation globally. The New Zealand dollar dropped the most in four weeks against its U.S. counterpart.

Europe’s shared currency declined to $1.4384 as of 1:13 p.m. in Tokyo from $1.4430 in New York. The so-called kiwi sank 0.5 percent against the dollar. The MSCI Asia Pacific Index increased 0.2 percent following its first weekly loss in four, while China’s Shanghai Composite Index swung between gains and losses. Standard & Poor’s 500 Index futures lost 0.2 percent. Oil slid 0.6 percent in New York. Silver rose to a 31-year high.

Greek Finance Minister George Papaconstantinou said the nation isn’t discussing a debt restructuring, even as investors drove the cost of insuring its bonds to a record. European Central Bank Governing Council members signaled they will keep tightening monetary policy this year amid accelerating inflation, while the People’s Bank of China said yesterday it will increase lenders’ reserve requirements.

“The European story has a lot of risks to it as Germany is very strong but peripheral Europe is clearly quite weak, so the last thing they need is higher interest rates,” Adrian Mowat, JPMorgan Chase & Co.’s Hong Kong-based chief Asia and emerging- markets strategist, said in a Bloomberg Television interview. “There’s a lot of uncertainty in how the Chinese economy comes out of this cycle. I’m very nervous going into the second quarter and I think a market correction is quite possible.”

Greek Debt

The euro weakened against 14 of its 16 most actively traded counterparts. It fell to 119.37 yen from 119.96 yen last week, and touched 118.94, the lowest level since April 1. The dollar bought 82.98 yen from 83.13 yen.

The cost of insuring Greek government debt rose to a record on April 15, with the contracts indicating investors see a more than 60 percent chance the nation will default within five years. Greece received a bailout from the European Union and the International Monetary Fund last year, and was followed by Ireland and Portugal in seeking aid.

“We are seeing signs the debt crisis in Europe is resurfacing,” said Misato Nakashima, a currency analyst at Himawari Securities Inc. in Tokyo. “The euro is poised to weaken as people have been cautious about its rapid advance recently.”

Japan’s bonds rose, dragging down 10-year yields by 2.5 basis points to 1.26 percent, the lowest level in two weeks. Data today may show European consumer confidence worsened this month, while separate reports this week are forecast to show home sales and housing construction failed to recoup February’s losses in March, according to separate surveys by Bloomberg News. Yields on 10-year Treasuries were little changed at 3.41 percent.

Consumer Prices

The New Zealand dollar declined to 79.53 U.S. cents from 79.95 cents in New York last week, the biggest drop since March 17. New Zealand’s consumer prices climbed 0.8 percent in the first quarter from the previous three months, slower than the median estimate of a 1 percent advance in a Bloomberg News survey of economists.

The S&P 500 rose 0.4 percent on April 15, trimming its weekly loss to 0.6 percent. Citigroup Inc., the third-largest U.S. bank, and Halliburton Co., the world’s second-biggest oilfield-services provider, are among companies scheduled to release first-quarter earnings today.

About three stocks advanced for every two that fell in the MSCI Asia Pacific Index, which sank as much as 0.2 percent earlier. AIA Group Ltd. jumped 2.8 percent in Hong Kong after the insurer said the value of new business rose 21 percent in the first quarter.

Reserve Ratios

Catcher Technology Co., a maker of notebook computer casings, rallied 5.1 percent in Taipei after reporting higher first-quarter profit. Honam Petrochemical Corp. surged 5.1 percent after saying it will revive a takeover plan of its KP Chemical Corp. unit.

Industrial & Commercial Bank of China Ltd., the world’s largest lender by market value, lost 0.6 percent in Shanghai after the PBOC said yesterday it’s raising reserve ratios by a half point from April 21. Central bank Governor Zhou Xiaochuan said on April 16 monetary tightening will continue for “some time.” The PBOC raised interest rates this month for the fourth time since October.

China’s seven-day repurchase rate, which measures interbank funding availability, gained 34 basis points to 2.70 percent, the highest level since April 1, according to a weighted average rate compiled by the National Interbank Funding Center. One-year interest-rate swaps, the fixed cost needed to receive the floating seven-day repurchase rate, rose two basis points to 3.40 percent, according to data compiled by Bloomberg.

Oil, Silver

Oil for May delivery fell 0.6 percent to $109.03 a barrel in New York, halting a three-day rally. Futures declined after Saudi Arabia, the world’s biggest exporter of the fuel, said the global market has more than ample supplies of crude. Brent crude oil declined 0.2 percent to $123.15 a barrel on the London-based ICE Futures Europe exchange.

Immediate-delivery silver rose as much as 0.9 percent to $43.3725 an ounce, a 31-year peak, before trading at $43.2625. Gold earlier advanced 0.1 percent to a record $1,488.68 an ounce before trading at $1,486.63.