By Justin Carrigan Jan. 15 (Bloomberg) -- The euro declined the most in almost a month against the dollar on concern Greece’s struggles to reduce its budget deficit will damage confidence in the region. Stocks rose and commodities fell. “The sharpening internal strains illustrate that the euro zone is far from being an optimal currency union,” Michael Hart, a foreign-exchange strategist at Citigroup Inc. in London, wrote in a report. “This will ultimately make itself felt in the value of the euro.” The common currency weakened versus 14 of its 16 most- traded peers at 10:26 a.m. in London, dropping as much as 0.8 percent compared with the dollar, the biggest decline since Dec. 17. Greek bonds slid for a fourth day. The MSCI World Index of 23 developed nations’ stocks rose 0.1 percent, while futures on the Standard & Poor’s 500 Index declined 0.1 percent. Oil fell for a fifth day, its longest losing streak in five weeks. European Central Bank President Jean-Claude Trichet’s warning yesterday that no member nation can expect “special treatment” fueled concern Greece’s debt won’t be eligible as collateral at the central bank, sending the cost of insuring Greek bonds against default to a record. As companies from Intel Corp. to JPMorgan Chase & Co. see improved profits, the S&P 500 is trading at 24.9 times earnings, the highest level since 2002. Greek Bonds The euro dropped as much as 1.1 percent against the yen and 0.5 percent versus the pound. The yield on the benchmark Greek two-year note jumped 16 basis points to 3.72 percent, the highest level in almost a year. Rating downgrades sparked a rout in Greece’s bonds in December as the budget deficit headed for 12.7 percent of gross domestic product, more than four times the European Union limit. Greece will present proposals today to lower the deficit to 8.7 percent by year-end. Credit-default swaps on Greek debt rose to 340, matching a record reached yesterday, according to CMA DataVision prices. Treasuries advanced, with the yield on the 10-year note falling 3 basis points to 3.71 percent. Europe’s Dow Jones Stoxx 600 Index advanced 0.4 percent, heading for a fifth week of gains. STMicroelectronics NV added 1.4 percent in Paris after Intel, the world’s biggest chipmaker, forecast better-than-estimated sales. Carrefour SA climbed 1.6 percent after Europe’s largest retailer met its full-year earnings target. Asian Stocks The MSCI Asia Pacific Index gained 0.5 percent to its highest level since August 2008. Commonwealth Bank of Australia, the nation’s biggest lender, jumped 2.3 percent in Sydney after saying first-half profit rose. U.S. stock-index futures were little changed after the S&P 500 yesterday added 0.2 percent. JPMorgan will report fourth- quarter results before the start of trading in New York, the first of the largest U.S. banks to do so. Profit may have more than tripled from the depths of the financial crisis in 2008, according to analyst estimates compiled by Bloomberg. Industrial production in the U.S. probably rose in December for the fifth time in the past six months, economists said before a report due at 9:15 a.m. in Washington. The New York Fed is scheduled to release its January general economic index today at 8:30 a.m. local time. A separate report due by 10 a.m. New York time may show the Reuters/University of Michigan preliminary sentiment index for January rose to 74, the highest level in two years, economists said. Emerging Markets The MSCI Emerging Markets Index rose 0.3 percent as Romania’s Bucharest BET Index gained 0.9 percent and Russia’s Micex Index climbed 0.6 percent. The Shanghai Composite Index advanced 0.3 percent as China’s foreign-exchange reserves increased to a record. Oil fell for a fifth day, its longest losing streak in five weeks, on evidence the pace of the U.S. rebound may be flagging. February crude fell 0.6 percent to $78.95 a barrel on the New York Mercantile Exchange. The S&P GSCI Index of commodities fell for a fifth day, the longest losing streak in a month. Corn declined 0.9 percent to $3.7775 a bushel in Chicago trading. Wheat and soybeans also declined. Copper fell 0.5 percent to $7,455.50 a metric ton on the London Metal Exchange, leading a drop in industrial metals.

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