US focus: Euro weakens on Greece

The euro fell amid speculation a Greek austerity plan and a European Union pledge to stabilize the region’s economy won’t resolve its sovereign-debt crisis.
The yen, Swiss franc and dollar rose as a lawmaker from Greece’s ruling Pasok party said he hasn’t decided to vote for the country’s new fiscal measures and Italian bank stocks slumped amid concern the crisis may spread.
“Greece concerns and Italian banks are what the market is focusing on,” said Camilla Sutton, head of currency strategy at Bank of Nova Scotia. “Everyone is just reacting to headlines. News from Europe will outweigh any economic data that comes out in the next few weeks.”
The shared currency weakened as Italy’s two largest banks, UniCredit SpA and Intesa Sanpaolo SpA, led a drop in bank stocks in Milan. Trading in both firms’ shares was briefly suspended after breaching limits on intraday swings.
Moody’s Investors Service said yesterday it may downgrade 13 Italian banks. The firm said last week Italy’s ratings may be cut because of slowing economic growth and the potential for Europe’s debt crisis to drive up borrowing costs.
The euro earlier rose after the Ifo institute said its business climate index for June increased to 114.5 in June from 114.2 in May.
The 17-nation currency headed for its third weekly decline against the dollar, the longest losing streak since February. It fell for a third week against the yen.
The Australian dollar gained against most major peers after Reserve Bank of Australia Assistant Governor Philip Lowe said that the nation’s biggest mining boom in a century risks accelerating inflation.
RBA Governor Glenn Stevens held the benchmark rate at 4.75% this month for a sixth straight meeting.