By Yoshiaki Nohara and Daniel Hauck Oct. 1 (Bloomberg) -- The euro fell against the dollar on speculation finance ministers and central bankers will discuss the currency’s strength at this week’s Group of Seven meeting. European stocks and U.S. index futures fluctuated. The European currency dropped versus 13 of its 16 major counterparts on prospects the euro region’s finance ministers and central bankers meeting today in Goteborg, Sweden will signal that further dollar weakness is unwelcome. The yen fell against the dollar as expansion in Chinese manufacturing sparked demand for higher-yielding assets in emerging markets. The Dow Jones Stoxx 600 Index of European shares slipped less than 0.1 percent at 10:20 a.m. in London after posting its biggest quarterly rally since 1999 yesterday. “The recent appreciation of the euro is beginning to bother policy makers in the euro zone, where deflationary pressure is strong,” said Takeshi Makita, a Tokyo-based economist at Japan Research Institute Ltd., a unit of Japan’s third-largest banking group Sumitomo Mitsui Financial Group Inc. The euro declined to $1.4572 from $1.4640 in New York yesterday. The 16-nation currency traded at 131.20 yen from 131.33 yen. The yen dropped to 90.07 per dollar from 89.70. European Union Monetary Affairs Commissioner Joaquin Almunia said officials will discuss the currency’s advance in preparation for the Group of Seven meetings, Reuters reported. G-7 finance chiefs are meeting in Istanbul this weekend. Yen Drops The yen fell against 12 of its 16 major counterparts after a report today showed China’s Purchasing Managers’ Index rose to 54.3 in September from 54.0 in August. Markets in Hong Kong and China are closed for holidays. Europe’s Stoxx 600 slipped after an 18 percent third- quarter surge, the biggest rally since the final three months of 1999. Equities have risen in the past two quarters as the Group of 20 nations committed $12 trillion to revive global growth and countries from Germany and France to Hong Kong and New Zealand exited recessions. The Stoxx 600 earlier climbed as much as 0.7 percent as the International Monetary Fund said the global economy will expand 3.1 percent next year, better than its July forecast for 2.5 percent growth, with Asia’s economies leading the world out of recession. Tandberg ASA, surged after Cisco Systems Inc. agreed to buy the world’s biggest videoconferencing-equipment maker for about $3 billion, while Munich Re climbed as the world’s biggest reinsurer announced the resumption of its share-buyback program. Tandberg Jumps Tandberg rallied 12 percent in Oslo. Cisco, the world’s largest maker of networking equipment, agreed to buy the Norwegian company for 17.2 billion kroner ($2.96 billion) to expand its video-conferencing products. Cisco will pay 153.50 kroner a share in cash, 11 percent more than Tandberg’s closing price yesterday. Cisco was little changed in German trading. Munich Re advanced 2 percent in Frankfurt. The reinsurer said it will repurchase shares with a volume of as much as 1 billion euros ($1.5 billion) by the time the company holds its 2010 annual general meeting. The MSCI Asia Pacific Index fell 1.1 percent as the Bank of Japan’s Tankan survey showed companies plan to deepen investment cuts. U.S. stock-index futures fluctuated between gains and losses before reports on U.S. manufacturing and consumer spending that may add to evidence the worst recession since the 1930s is easing. The Standard & Poor’s 500 Index’s 56 percent rebound from its 12-year low on March 9 pushed valuations to 20.2 times the reported earnings of its companies last week, the highest level since 2004, according to data compiled by Bloomberg. Manufacturing may have expanded last month at the fastest pace in more than three years and consumer spending in August probably grew the most since 2003. The Institute for Supply Management’s factory gauge rose to 54 in September from 52.9 the month before, according to a Bloomberg News survey of economists. Fifty is the dividing line between expansion and contraction. To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net; Ron Harui in Singapore at rharui@bloomberg.net

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