The euro advanced, extending last week’s gains versus the dollar and yen, after France and Germany said they want a rewrite of the European Union’s governing treaties to tighten economic cooperation in the region.
The euro dropped against the dollar and yen as concern the region’s debt crisis is getting worse pushed the extra yield investors demand to hold Greek 10-year bonds instead of German debt to a record 10 percentage points.
The euro dropped against most of its major counterparts before leaders of the 17 euro nations agreed to tighten economic cooperation, clearing the way for a comprehensive package to counter the region’s debt crisis.
The euro reached a one-week high versus the dollar after European Central Bank President Mario Draghi said policy makers have averted a credit shortage and Spain sold almost twice its maximum target at a note auction.
The euro gained as European Central Bank President Mario Draghi said he saw signs of stabilization in the region and yields decreased at Spanish and Italian debt auctions. U.S. stocks rose, erasing early losses. Treasuries fell as a 30-year bond sale drew lower-than-average demand.
The dollar fell against most its major counterparts as Federal Reserve Chairman Ben S. Bernanke said the central bank should maintain record monetary stimulus to boost a “frustratingly slow” economic recovery.