The euro rose toward a one-week high against the yen after Belgian Finance Minister Didier Reynders said the region could increase the size of its 750 billion-euro ($1 trillion) bailout fund, easing concern over the debt crisis.
The common currency was close to a two-week high versus the dollar after Reuters said yesterday the International Monetary Fund will ask European officials to enlarge the aid package, citing an IMF report it obtained. The New Zealand dollar fell from near its strongest in almost two weeks as economists forecast the South Pacific nation’s central bank to keep interest rates unchanged during a meeting this week.
“European officials are taking one step after another to cope with the debt crisis, even though they are being reactive,” said Kazuya Yashiro, a currency analyst at Himawari Securities, Inc. in Tokyo. “The bias is for the euro to be bought back in the near term.”
The euro advanced to 110.93 yen as of 8:19 a.m. in Tokyo from 110.73 yen in New York on Dec. 3. It touched 111.19 yen on Dec. 2, the highest level since Nov. 29. The single currency was at $1.3412 from $1.3414 last week, after earlier rising to $1.3442, the strongest level since Nov. 23. The yen dropped to 82.70 per dollar from 82.53.
New Zealand’s dollar fell to 76.51 U.S. cents from 76.60 cents last week, when it reached 76.75 cents, the most since Nov. 23. The currency was little changed at 63.28 yen.
Reynders told reporters in Brussels on Dec. 4 that the rescue fund could be increased if governments decide to create a larger one as part of a permanent crisis mechanism in 2013. “If we decide this in the next weeks or months, why not apply it immediately to the current facility?” he said.
European officials are under pressure to find new ways to halt contagion spreading from Greece and Ireland amid concern the bailout package may not be large enough to rescue Spain if needed. The ECB President Jean-Claude Trichet last week extended liquidity measures and the bank bought bonds to quell concern some nations may default on their debt.
Finance ministers will meet in Brussels today. Reynders said they will discuss the outlook for Portugal, which is struggling to quash speculation it will also need a bailout.