Jan. 24 (Bloomberg) -- The dollar advanced from a two-month low against the euro before U.S. data this week that economists said will show a growing economy and increasing consumer confidence. Japan's yen depreciated against 11 of its 16 most-traded counterparts as rising stocks in Asia and Europe sapped demand for the safest assets. The euro weakened, snapping a four-day advance, after the collapse of the Irish coalition government threw budget plans into disarray. The pound fell before a report that economists said will show U.K. growth slowed. "The U.S. economic data flow could be dollar-supportive this week," said Lee Hardman, a strategist at Bank of Tokyo- Mitsubishi UFJ Ltd. in London. "The yen has been on the defensive as the market's taken on a more risk-friendly environment." The dollar climbed 0.4 percent to $1.3562 per euro as of 10:30 a.m. in London, after earlier falling to $1.3647, the lowest level since Nov. 22. The greenback also gained 0.3 percent to 82.82 yen, and Japan's currency was at 112.32 per euro from 112.48 in New York last week. The U.S. Conference Board's confidence index rose to 54.2 in January from 52.5 in December, according to a Bloomberg survey before the report tomorrow. Gross domestic product climbed at a 3.5 percent annual pace last quarter, from a 2.6 percent rate the previous three months, a separate survey showed before the data on Jan. 28. Irish Coalition Falls The euro weakened against the dollar for the first day in five. Irish political leaders said they'll press to pass a budget before elections after the Green Party left Prime Minister Brian Cowen's coalition. Passing the plan is a condition of Ireland's 85 billion-euro ($115 billion) aid package from the International Monetary Fund and the European Union. "There are question marks over the situation in Ireland and what that will imply for their consolidation and ongoing structural issues," such as a potential delay for the aid package, said Jeremy Stretch, executive director of foreign- exchange strategy at Canadian Imperial Bank of Commerce in London. The euro fell 0.2 percent, according to Bloomberg Correlation-Weighted Currency Indexes, which track a basket of 10 developed-country currencies. That was the first decline in five days, the indexes show. The single currency is likely to continue "an unwind of what was extremely strong euro pricing last week, particularly given the Irish news," said Geoff Kendrick, head of European foreign-exchange strategy at Nomura International Plc in London. Obama Speech The Dollar Index, which tracks the dollar against the currencies of six major U.S. trading partners, rose 0.2 percent to 78.42, after sliding 1.2 percent last week. President Barack Obama said tomorrow's State of the Union address will focus on cutting the deficit, reducing unemployment and ensuring the U.S. can compete with economic rivals. The Federal Reserve will leave its benchmark rate unchanged at zero to 0.25 percent at a Jan. 25-26 meeting, according to all 98 economists surveyed by Bloomberg. "My principal focus, my number one focus, is going be making sure that we are competitive, that we are growing, and we are creating jobs not just now but well into the future," Obama said in a video released over the weekend. The pound snapped two weeks of gains against the greenback before tomorrow's growth report amid waning speculation that the Bank of England will raise interest rates this year. U.K. gross domestic product likely rose 0.5 percent in the fourth quarter, compared with a 0.7 percent increase in the third quarter, according to a Bloomberg News survey. "The markets are a bit premature in expecting the Bank of England to hike rates anytime in the next few months," said Mitul Kotecha, Hong Kong-based head of global foreign-exchange strategy at Credit Agricole CIB, said in an interview with Bloomberg Television. "That might just see a little more downside risk to sterling." The pound declined 0.4 percent to $1.5942, after appreciating 0.8 percent last week. --With assistance from Ron Harui and Masaki Kondo in Singapore, Julianna Goldman and Elliot Smith in Washington and Rishaad Salamat in Hong Kong. Editors: Keith Campbell, Tim Farrand.

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