By Anna Rascouet Nov. 10 (Bloomberg) -- The euro advanced against the pound as European stocks rebounded and Fitch Ratings said the U.K.’s credit rating is most at risk among top-rated nations. The single European currency, which fell against the yen and the dollar after a report showed German investor confidence declined in November by more than economists estimated, erased losses as the Dow Jones Stoxx 50 Index rose as much as 0.4 percent. The pound dropped against all but one of the 16 major currencies after David Riley, head of global sovereign ratings at Fitch, said the U.K. needs “the largest budget adjustment.” “It’s a risk appetite move,” said Chiara Cremonesi, a currency strategist at UniCredit SpA in London. “Despite disappointing economic numbers, stocks are holding ground and that is the crucial variable for the euro.” The euro traded at 89.86 U.K. pence per euro as of 6:41 a.m. in New York, from 89.49 pence yesterday. It strengthened to 135.27 yen, from 134.91 yen, and was at $1.5005, from $1.4999. The single currency climbed as high as $1.5020, tied for the highest level in two weeks. The pound declined to $1.6697, from $1.6759. Sterling also fell against the Swiss franc and Norwegian krone. Britain’s “stable rating outlook reflected our expectation that the U.K. government will articulate a stronger fiscal consolidation program next year,” Riley also said in a statement from Tokyo. The pound declined 0.4 percent to 1.6815 francs and weakened 0.4 percent to 9.3226 kroner. Confidence Drops The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict developments six months ahead, dropped to 51.1 from 56 in October. The median forecast in a Bloomberg News survey of 39 economists was for a decline to 55. The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six major U.S. trading partners, rose 0.1 percent to 75.102. The gauge fell to 74.930 yesterday, the lowest level since August 2008. European Central Bank council member Yves Mersch said the bank may raise its economic growth forecast in December. “It would not be surprising if our forecast would be revised upwards,” Mersch told Bloomberg News after a hearing at the Luxembourg Parliament today. “You will see the official statement of the ECB according to its broad macroeconomic projections that will be published in a few weeks’ time.” BusinessEurope, the European employers’ federation, said the euro has reached a “pain threshold for industry” in the 16 nations using the currency as the region pulls out of the worst recession in six decades. “I am deeply concerned about recent exchange-rate developments,” Juergen Thumann, head of the Brussels-based group, said yesterday in an e-mailed statement before a meeting with European policy makers. “This is not good news for growth in Europe.”

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