Euro Declines Before Summit on Debt Concern; Swiss Franc Rises to Record

The euro fell to a record versus the Swiss franc and slid the most in almost a week against the dollar on concern European leaders will fail to agree on a way to contain the region’s debt crisis at a summit this week.

The franc reached an all-time high versus the dollar on demand for safety after European Central Bank President Jean- Claude Trichet repeated his opposition to any restructuring of Greek debt. Italian and Spanish bond yields surged to euro-era records. The yen rallied against most of its major peers and gold surged to a new high. Sweden’s krona dropped to a seven-month low against the euro on speculation Europe’s debt turmoil will curb the Scandinavian nation’s growth.

“The euro’s drop seems to still all be predicated on the concern over the euro-zone debt crisis,” said Carl Forcheski, a director on the corporate currency sales desk at Societe Generale SA in New York. “Italian bond yields have traded higher. It’s peripheral euro-zone crisis, fears of contagion.”

The euro dropped as much as 1 percent to $1.4014 in the biggest intraday decline since July 12 before trading at $1.4058 at 12:15 p.m. in New York, compared with $1.4157 on July 15. The shared currency slid 0.8 percent to 111.09 yen and weakened 0.5 percent to 1.1485 Swiss francs after tumbling to a record low 1.1374. The franc was 0.3 percent weaker against the dollar at 81.80 centimes after reaching 80.33, the strongest on record. The dollar was little changed at 79.09 yen.

Gold for immediate delivery gained as much as 0.6 percent to $1,603.40 an ounce. The Standard & Poor’s 500 Index decreased 1.3 percent.