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Euro Weakens on Greek Debt Concerns


The euro weakened for the first time in three days versus the dollar, while oil and copper fell in New York on concern European governments will struggle to resolve the region’s debt crisis amid a slowing global recovery.

The euro declined against 15 of its 16 major peers at 6:30 a.m. in New York. The yield difference between Portuguese and German 10-year bonds climbed to a record and Italian 10-year yields rose as the government sold debt. Oil slid 0.5 percent, copper fell for the first time in five days and wheat sank 3.1 percent. The Stoxx Europe 600 Index was little changed, with EON AG and RWE AG (RWE) dropping after Germany set a date to close nuclear reactors. Standard & Poor’s 500 Index futures added 0.2 percent.

Greek Prime Minister George Papandreou said he’ll press ahead with new austerity measures even as he failed to win backing from opposition parties. U.S. employers probably hired fewer workers in May and factory orders in the world’s largest economy grew at the slowest pace in seven months, economists said before reports this week.

Greece “will be the focus this week, whether they can agree on the austerity conditions that are required,” Tim Condon, head of Asia research at ING Groep NV, said in a Bloomberg Television interview from Hong Kong. Doubts about the global economy will first “hit the peripheral European debt crisis countries,” he said.

Austerity Plan

The euro slipped 0.3 percent against the dollar and 0.2 percent versus the yen. Greece’s Antonis Samaras, leader of the biggest opposition party, New Democracy, rejected Papandreou’s austerity plan at a meeting with him and other opposition leaders in Athens, saying his party wouldn’t be blackmailed. European Union officials have called for consensus on the package, which includes an extra 6 billion euros ($8.6 billion) of budget cuts and a plan to speed 50 billion euros of state- asset sales.

The EU may withhold the next amount of credit to Greece after a report by an international panel of inspectors concluded that the debt-laden country has missed all the fiscal targets agreed in its rescue plan, Der Spiegel said, without saying how it obtained the information.

Portuguese 10-year bonds fell the most in a week, sending the yield spread with German bunds, Europe’s benchmark government security, 23 basis points higher to 683 basis points, the most since Bloomberg began gathering the data in 1997. Bunds were little changed with the rate within two basis points of a four-month low. Italian 10-year yields rose five basis points to 4.80 percent after the government sold 8.3 billion euros ($12 billion) debt.

Russia Ban

Oil for July delivery fell to $100.07 a barrel in New York, and copper for July delivery dropped 0.8 percent. Milling wheat futures fell after Russia said on May 28 it will let a grain- export ban expire July 1, increasing supply as drought and flooding threatens crops in Europe and the U.S. Markets in the U.K. were closed for a public holiday today.

Five stocks advanced for every three that declined in the Stoxx 600. EON and RWE, Germany’s largest utilities, fell more than 1.5 percent as Chancellor Angela Merkel’s coalition said all nuclear plants must close by 2022. A tax on spent fuel rods will remain even as the shutdown proceeds. Vestas Wind Systems A/S, the largest wind-turbine manufacturer, climbed 2.7 percent and Renewable Energy Corp. ASA gained 3.4 percent.

The S&P 500 advanced for a third day on May 27, paring its weekly loss to 0.2 percent. The four-week slump was the longest losing streak since February 2010. There was no trading of Treasuries for the Memorial Day holiday today.

Payrolls probably rose 185,000 in May, slowing from a 244,000 gain in April, according to the median forecast in a Bloomberg News survey before Labor Department figures June 3. A separate survey showed the Institute for Supply Management’s factory index likely fell to 57.6 this month, the lowest level since October.

The MSCI Emerging Markets Index rose for a third day, gaining 0.2 percent. The MSCI Asia Pacific Index was little changed.