The dollar rose to its strongest against the euro in two weeks

The dollar rose to its strongest against the euro in two weeks as Treasury yields in almost seven months of concern and policy makers in Europe are not doing enough to stem the crisis in the region boosted debt demand for U.S. financial assets.

The dollar rose 0.5 percent to $ 1.3181 per euro at 4:06 pm in New York from $ 1.3244 yesterday and touched $ 1.3133, the strongest since Dec. 2. The dollar rose 0.1 percent against the yen at 83.97 yen from 83.91 yen. 84.51 reached on December 15, the most since Sept. 24.

The euro rose earlier after EU leaders agreed to create a mechanism to contain future debt crisis and German business confidence unexpectedly rose. Beyond the permanent structure of the debt crisis in 2013, the leaders struggled to overcome divisions on immediate measures to stabilize the bond market.

"We are seeing a situation where the U.S. dollar should do a bit better," said Shaun Osborne, currency strategist at TD Toronto-Dominion Bank Securities unit of Toronto. "The euro is likely to fall still offers taking into account the still very significant fiscal challenges that we have sovereignty in the euro area."

Yields of 10-year Treasury fell nine basis points to 3.33 percent after touching 3.44 percent. Yesterday, the production reached 3.56 percent, the highest since May 13.

EU Summit

EU leaders concluded a two-day summit in Brussels today. They agreed to modify the treaties of the block to create a permanent mechanism for crisis management to enter into force in 2013.

Germany, the largest European contributor to the purchase of Greece and Ireland, pushed through a proposal that would allow financial assistance "if necessary" to prop up the euro and can force bondholders to bear some costs future bailouts.

German Chancellor Angela Merkel has ruled out putting more money on the table, the reorganization after the Greek European rescue FSF so that you can buy government bonds with problems, or more intertwined European economies through the sale of joint bond.

U. K. won 't pay

British Prime Minister, David Cameron, said his country will not pay in the rescue mechanism of the euro-region and said he wanted the European Union budget frozen as he sought to distance Britain's policies region.

The Ifo institute, based in Munich, said its business climate index, based on a survey of 7,000 executives, rose to 109.9 from 109.3 in November. That's the highest since records of the reunified Germany began in 1991. Economists forecast a drop to 109, the median of 36 forecasts in a survey.

Moody's Investors Service downgraded the credit rating of Ireland for five levels to Baa1 after the government was forced to seek outside help last month, staggered by losses in the banking system.

"The financial strength, the Irish government could decline further if economic growth would be weaker than currently projected, or the cost of stabilizing the banking system appear to be higher than currently forecast," said Moody's.

Yearly View

The euro fell against most of his 16 counterparts on the stock exchange has fallen 9.7 percent this year, a measure of the currencies of 10 developed countries.

U.S. Congress passed a bill of 858 billion was extended by two years, all the tax cuts of the Bush era, sending the measure to President Barack Obama for his signature. Obama plans to sign the bill into law at 3:50 pm at the White House, the government said in an emailed statement.

The Conference Board's measure of the U.S. perspective for the next three to six months rose 1.1 percent, the most in eight months, after increasing 0.4 percent revised in October, the New York group, said today.

The pound was the worst performance against all their older colleagues. The pound weakened 0.7 percent to $ 1.5525 and lost 0.2 percent to 84.91 pence per euro.

Impairment charge

Lloyds Banking Group Plc, a British bank that is 41 percent owned by the government, said it expects to report a further impairment charge of 4.3 billion pounds (6.7 billion) due to the Irish loan losses.

The yen headed for a weekly decline against a basket of 10 currencies as the MSCI Asia Pacific Index of regional shares rose. People's Bank of China, Zhou Xiaochuan, said his nation will not increase reserve ratios and interest rates at the same time, the South China Morning Post, citing a speech at Peking University.

Zhou said yesterday that the increases in mandatory bank reserves do not rule out increases in interest rates, the English-language newspaper in Hong Kong said today.

"The risk sentiment remains strong, supporting higher-yielding currencies against the currencies of developed nations," said Koji Fukaya, senior currency strategist in Tokyo at Credit Suisse Group AG. "The currencies should strengthen against the yen."