Euro Gains After Moody’s Considers U.S. Debt Review

The euro gained versus the dollar to the highest level in almost a month as Moody’s Investors Service said it may place the U.S. government’s rating under review for possible downgrade and German Chancellor Angela Merkel said she’s committed to the shared currency.

The euro extended gains after Moody’s said its decision will be based on progress by Congress and the Obama administration on increasing the statutory debt limit in coming weeks. The euro also strengthened as the region’s policy makers considered asking investors to reinvest in new Greek debt when existing bonds mature. The dollar dropped against the majority of its most-traded peers as weaker economic data added to speculation the nation’s recovery is slowing.

“It’s still a major theme and I don’t see any compelling reason in the medium term to actually want to be a dollar buyer,” said Mark McCormick, a currency strategist at Brown Brothers Harriman & Co. in New York. “The economics fundamentally support dollar weakness across the board and that would just add to the fiscal risk premium.”

The euro rose 1.2 percent to $1.4502 as of 1:47 p.m. in New York from $1.4328 yesterday. It touched $1.4514, the most since May 6. Europe’s common currency climbed 1 percent to 117.19 yen. The dollar fell 0.1 percent to 80.84 yen.

South Africa’s rand and Norway’s krone rose the most among the major currencies as commodities advanced. The Thomson Reuters/Jefferies CRB Index of 19 raw materials rose 0.4 percent.