The euro declined against the dollar for the first time in four days on concern the region’s debt crisis will hamper efforts by governments and banks to raise funds this year. The dollar rose against the yen for the first time in 11 days before a report forecast to show U.S. manufacturing advanced in December. The Canadian dollar rose to the highest level against the greenback since May 2008 as crude oil and U.S. stock-index futures advanced. “The near-term bias is for euro weakness,” said Steven Englander, head of Group of 10 currency strategy at Citigroup Inc. in New York. “The trend that will stay from 2010 will be risk-on, and we do like the commodity currencies in 2011.” The euro fell 0.3 percent to $1.3349 at 8:55 a.m. in New York, from $1.3384 on Dec. 31. The euro rose 0.3 percent to 108.80 yen, from 108.47. The dollar advanced 0.5 percent to 81.50 yen, from 81.12. Its 10-day decline from Dec. 20 to 31 was the longest losing streak since October 2004. Canada’s currency rose for a ninth straight day, appreciating 0.6 to 99.17 Canadian cents per U.S. dollar, after advancing to 99.06 cents, the strongest level since May 2008. Financial markets in Canada, the U.K., Australia, New Zealand and Japan are closed today for public holidays. Crude for February delivery rose to $92.23 a barrel, the highest since Oct. 7, 2008. Futures on the Standard & Poor’s 500 Index expiring in March rose 0.8 percent. Euro in 2010 The euro tumbled 6.5 percent versus the dollar in 2010 as the European debt crisis prompted concern the currency union might fracture. The trading bloc added Estonia as its 17th member nation on Jan. 1. “The euro is the one currency we see falling against the dollar in the first quarter,” said Robert Ryan, a currency strategist at BNP Paribas SA in Singapore. “It’s the inability of the European institutions to get ahead of the curve. The real efforts to address the crisis have only come on the eve of utter collapse.” The likelihood the euro area will exist in its current structure in a decade is 20 percent as governments fail to take sufficient measures to tackle economic imbalances, the Centre for Economics and Business Research in London said last week. The currency region will have another debt crisis by this spring, when Spain and Italy have to refinance more than 400 billion euros ($534 billion) of bonds, CEBR Chief Executive Officer Douglas McWilliams said in an e-mailed note on Dec. 31. Currency Outlook “The euro might break up at this point, though European politicians are normally able to respond to a crisis,” he said. “If the euro doesn’t break up, this could be the year when it weakens substantially toward parity with the dollar.” The European currency will decrease to $1.30 by the end of March, according to the median prediction of 37 analysts in a Bloomberg News survey. The region’s manufacturing industry grew in December more than initially estimated, powered by Germany’s export-led expansion. A gauge of manufacturing in the euro area rose to 57.1,from 55.3 the previous month, a higher figure than earlier reported, London-based Markit Economics said. A reading of more than 50 indicates expansion. The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six major U.S. trading partners, rose 0.2 percent. U.S. Manufacturing Manufacturing in the U.S. probably grew in December at the fastest pace in seven months, reinforcing signs the expansion gained momentum at the end of 2010, economists said before the report. The Institute for Supply Management’s factory index rose to 57 last month from 56.6 in November, according to the median forecast of 57 economists in a Bloomberg News survey. A separate report may show construction spending increased 0.2 percent in November after a 0.7 percent advance. Taiwan’s dollar gained 0.6 percent to close at NT$30.20 against its U.S. counterpart, according to Taipei Forex Inc. It touched NT$29.080 on Dec. 30, the strongest level since October 1997. Consumer prices climbed 1.7 percent in December, the most in 10 months, according to the median estimate of seven economists in a Bloomberg survey before figures due Jan. 5. To contact the reporters on this story: Allison Bennett in New York at abennett23@bloomberg.net; Lucy Meakin in London at lmeakin1@bloomberg.net To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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