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Euro Buys Time as Bund-Treasury Spread at 2-Year High

The highest yields on German short-term bonds in two years relative to Treasuries are boosting the euro, easing pressure on Chancellor Angela Merkel as Europe’s leaders consider expanding a rescue program to end the region’s debt crisis.

Yields on German two-year notes rose last week to 87 basis points more than Treasuries of similar maturity, the most since January 2009, luring investors to higher returns on euro-denominated assets. Europe’s common currency is up 2.8 percent from an eight-year low reached on Jan. 10 against a basket of nine developed-nation peers, Bloomberg Correlation-Weighted Indexes show.