American focus: euro rose for a second day versus the dollar

The euro rose for a second day versus the dollar as traders said the shared currency’s decline may have been too quick after European leaders agreed to discuss closer banking cooperation in the euro bloc. European Commission President Jose Barroso and German Chancellor Angela Merkel agreed to discuss proposals on banking coordination when they meet today in Berlin.

The commission, the European Union’s executive, last week called for a “banking union” that would integrate supervision of lenders more tightly and create a pool of EU funds to clean up banks with cross-border exposure. The Brussels-based commission also proposed that the euro’s permanent bailout fund inject cash to banks instead of channeling the money through national governments.

The dollar strengthened against the yen as Treasury yields rose for the first time in four days, from record lows.  The dollar snapped a three-day drop against the yen after Japanese Finance Minister Jun Azumi pledged on June 1 to take “decisive action” on his nation’s currency should “excessive moves” persist. Azumi declined to comment on whether Japan has intervened in the currency market at a news conference.