By Paul Dobson and Yoshiaki Nohara Feb. 9 (Bloomberg) -- The yen and dollar fell on speculation European officials meeting this week will agree to assist Greece in tackling its budget deficit, reducing demand for the currencies as a refuge. The euro snapped a four-day slide versus the dollar after a European Central Bank spokeswoman said President Jean-Claude Trichet will leave a meeting in Sydney early for a European Union leaders’ summit. Australia’s dollar gained against its U.S. counterpart after central bank Governor Glenn Stevens warned against keeping interest rates too low for too long. “There’s increased speculation that support measures will be announced for Greece this week and that’s triggering a relief rally,” said Lee Hardman, a currency strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. “It’s put on a degree of support for risk assets because it would ease near-term sovereign-default fears.” The euro rose to $1.3726 as of 8:18 a.m. in London from $1.3649 in New York yesterday. It advanced to 122.94 yen from 121.81 yen yesterday. Japan’s currency declined to 89.57 per dollar from 89.26. The euro fell to $1.3586 on Feb. 5, the lowest level since May 20, as investors bet sovereign risk crises in nations such as Greece, Portugal and Spain will force policy makers to keep interest rates at record lows for longer. The speculation member nations may struggle to pay their debt reduced demand for European assets and boosted demand for the safest currencies and securities. Credit-default swaps on the debt of Greece, Spain and Portugal rose to record highs last week. Overshadow Summit Greece’s woes threaten to overshadow the Feb. 11 EU leaders’ summit, called to lay the groundwork for a 10-year economic program. EU President Herman Van Rompuy didn’t directly mention Greece in a letter on the meeting’s agenda sent to leaders yesterday. Trichet will today depart a symposium marking the Reserve Bank of Australia’s 50th anniversary to attend a gathering of EU leaders, ECB spokeswoman Regina Schueller said. Australia’s dollar rose against the greenback and yen after Stevens signaled he may increase borrowing costs, and as gains in Asian stocks revived demand for higher-yielding assets. “If the root problem is simply that interest rates are too low, experience suggests that efforts to handle the problem by regulation aimed at constraining balance-sheet growth won’t work for long,” Stevens said in paper delivered at the Sydney meeting of central bankers. The MSCI Asia Pacific Index snapped three days of losses to rise as much as 0.4 percent. China Stocks “Asian stock markets, especially Chinese indexes, may act as a stabilizer, which is positive for the Aussie dollar,” said Hideo Shimomura, who helps oversee the equivalent of $56 billion as chief fund investor in Tokyo at Mitsubishi UFJ Asset Management Co. “In the long run, the Aussie is OK because Australia should hike rates a couple of times.” Australia’s currency rose 0.7 percent to 87.19 U.S. cents, and 1.2 percent to 78.08 yen. To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net; Paul Dobson in London at pdobson2@bloomberg.net

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