Euro Declines to Lowest in Almost a Week Versus Dollar on Greek Concern

The euro fell to its weakest level in almost a week versus the dollar as investors speculated European policy makers won’t be able to reach an agreement regarding Greece’s debt obligations.

Canada’s dollar fell from a three-month high against its U.S. counterpart after the nation’s economy unexpectedly contracted in the fourth quarter. The dollar and yen pared earlier losses as stocks fell after consumer confidence and business activity in the U.S. was weaker than forecast in January. The euro weakened against the majority of its most- traded peers as Standard & Poor’s increased the number of Portuguese banks on “creditwatch negative.”

“There is still no news on the Greek private-sector involvement, and it will now drag out until Feb. 13, so that has weighed on sentiment,” said Mary Nicola, a New York-based currency strategist at BNP Paribas SA. A formal offer for a debt swap must be made by Feb. 13, Greek Finance Minister Evangelos Venizelos told reporters in Athens today.

The euro was down 0.5 percent to $1.3079 at 2:21 p.m. New York time, after touching $1.3042, the lowest level since Jan. 25. The dollar fell 0.1 percent to 76.26 yen after falling to 76.16 yen, the weakest level since Oct. 31. The European shared currency fell 0.6 percent to 1.00261 yen.

New Zealand’s dollar and South African rand rallied as investors sought higher-yielding assets.