American focus:

The dollar fluctuated against the euro and the yen as European Union leaders started a two-day summit in Brussels amid divisions about boarder steps to address the region’s financial crisis. The dollar earlier strengthened against most of its major counterparts as Treasuries erased gains after housing starts rose more than forecast and a regional economic index accelerated at the fastest pace since 2005. Moody’s Investors Service placed Greece’s Ba1 local and foreign currency government bond ratings on review for possible downgrade. The Philadelphia Fed reported its general economic index, a gauge of regional manufacturing, increased to 24.3 this month, from 22.5 in November. The median forecast of 59 economists was for a drop to 15. A reading greater than zero signals expansion in eastern Pennsylvania, southern New Jersey and Delaware. First-time claims for unemployment insurance fell to 420,000 during the week ended Dec. 11, from a revised 423,000 in the prior period, the Labor Department reported. Housing starts advanced 3.9 percent to a 555,000 annual rate in November after a drop of 11.1 percent in the prior month and a decrease of 2.1 percent in September, the Commerce Department reported. “The Philly Fed was stronger than the market expected,” said Amelia Bourdeau, a currency strategist in Stamford, Connecticut, at UBS AG. “The prices-paid component jumped, meaning higher inflation.” U.S. 10-year yields rose as much as eight basis points to 3.56 percent. “There’s a focus on what U.S. Treasury yields are doing and the news coming out of Europe with regards to ratings actions on Spain or Greece,” said Richard Franulovich, a senior currency strategist at Westpac Banking Corp. in New York.