The
euro advanced for a second day against the dollar and the yen as the International
Monetary Fund was said to seek a $1 trillion expansion of its
lending resources to safeguard the global economy.
The
17-nation currency strengthened against all except two of its 16 major
counterparts before Greek Prime Minister Lucas Papademos
resumes negotiations with bondholders over proposed losses on 18 January. The
dollar weakened before U.S. reports that economists said will show industrial
production and confidence among homebuilders increased, damping demand for the
safety of the greenback. The pound fell against the euro as a report showed the
British unemployment
rate rose to a 16-year high.
The
euro advanced 0.7 percent to $1.2829, after rising
0.5 percent on 17 January. Europe’s shared currency
climbed 0.6 percent to 98.48 yen. The dollar was
little changed at 76.77 yen.
The
Washington-based IMF is pushing China,
Brazil, Russia, India, Japan
and oil-exporting nations to be the top contributors, according to an official
of a Group of 20 nation, who spoke on condition of anonymity because the talks
are private. The fund wants the agreement struck at the Feb. 25-26 meeting of
G-20 finance ministers and central bankers in Mexico City, the official said.
IMF
Managing Director Christine Lagarde said her staff are
studying options to increase the fund’s war chest beyond the current $385
billion. While euro-region nations have already pledged to contribute 150
billion euros, the U.S. has said it has no plans to make new bilateral loans
and G-20 leaders ended last year at odds over the issue.
Greece
will resume talks with the Institute of International Finance, which represents
private creditors. The Washington
based IIF broke off negotiations last week after failing to agree with the government
about how much money investors will lose by swapping their bonds.
The
Greek government is nearing a deal with bondholders that would give them cash
and securities with a market value of about 32 cents per euro of debt,
according to Bruce Richards, chief executive officer of New York-based Marathon
Asset Management LP, who is on the committee of 32 creditors.