Euro Weakens for Third Day Before First Portuguese Bond Sale in Two Months

The 17-nation euro declined 0.3 percent today, according to Bloomberg Correlation-Weighted Currency Indexes, which track the foreign exchange of 10 developed nations. Photographer: Chris Ratcliffe/Bloomberg

The euro declined for a third day against the dollar before Portugal seeks to borrow as much as 1 billion euros ($1.4 billion) in its first bond sale for two months as it seeks to avoid a European Union bailout.

Europe’s common currency erased an earlier decline against the yen and weakened against all but one of its 16 most-actively traded peers. Portugal is trying to sell bonds due 2013, returning investor focus to the debt crisis that forced Ireland and Greece to seek aid. Greek 10-year yields yesterday soared to the most since the euro’s introduction. Australia’s dollar fell for a fifth day after a report showed home-loan approvals dropped the most in a year.

“The risks in the periphery of the euro zone are building up,” said Ian Stannard, a senior currency strategist at BNP Paribas SA in London. “Portugal’s issuance is going to be very important.”

The euro lost 0.3 percent to $1.3865 as of 8:46 a.m. in London, capping its longest run of declines since Feb. 15. It climbed to $1.4036 on March 7, the strongest level since November. It was little changed at 114.89 yen, from 114.94 yesterday in New York. Japan’s currency depreciated to 82.86 per dollar from 82.67.

The 17-nation euro declined 0.3 percent today, according to Bloomberg Correlation-Weighted Currency Indexes, which track the foreign exchange of 10 developed nations. It’s up 2.2 percent this year, driven by expectations that the European Central Bank will boost interest rates.

To contact the reporter on this story: Lukanyo Mnyanda in Edinburgh at lmnyanda@bloomberg.net

To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net