The euro strengthened the most in eight months

Currencies

EUR/USD The euro rose, as Germany had balked at changing the order of seniority on as much as 100 billion euros in emergency loans to Spanish banks and at committing to direct sovereign-debt buying through the euro-area bailout funds, saying on June 21 that such a move is “not up for debate.”

• The euro strengthened the most in eight months, increasing 1.1 percent to $1.2579 at 1:06 p.m. in Tokyo to head for the biggest gain since Oct. 27. Futures on the Standard & Poor’s 500 Index advanced 1 percent, and those on the FTSE 100 Index gained 1.7 percent. Finance ministers will enact today’s deal at a meeting on July 9, European Union President Herman Van Rompuy said, calling the accord a “breakthrough.”

AUD/USD The Australian dollar climbed, reversing earlier declines, after European leaders announced measures to support funding for Spain, boosting demand for higher- yielding assets.

• The Australian dollar gained 1.5 percent to $1.0197 as of 4:07 p.m. in Sydney. It climbed 1.4 percent to 80.96 yen. Australia’s 10-year government bond yield increased 11 basis points, or 0.11 percentage point, to 3.09 percent. New Zealand’s two-year swap rate, a fixed payment made to receive floating rates, climbed seven basis points to 2.74 percent.

USD/CAD Canada’s dollar fell for a second day against its U.S. counterpart as demand for currencies of commodity-producing nations eased amid speculation Europe’s financial crisis will slow global growth. aversion to higher-returning assets eased.

• Canada’s currency, (loonie), dropped 0.8 percent to C$1.0332 per U.S. dollar at 5 p.m. in Toronto, after falling as low as C$1.0363, the weakest since June 6. One Canadian dollar buys 96.79 cents. yesterday, the lowest since June 12. One Canadian dollar buys 97.66 cents.

Commodities

Oil rebounded from the lowest close in almost nine months in NYMEX amid speculation a European Union embargo on Iran, OPEC’s second-largest exporter, and a strike in Norway will tighten crude supplies.

• Oil for August delivery increased as much as $1.78 to $79.47 a barrel in electronic trading on the NYMEX and was at $79.29 at 2:17 p.m. Sydney time. The contract yesterday plunged $2.52, or 3.1 percent, to $77.69, the lowest close since Oct. 4. Prices are down 20 percent this year and have dropped 23 percent this quarter.

Gold rose, on speculation that Europe’s debt crisis will boost demand from investors seeking to protect their wealth and drive prices higher after the biggest quarterly slump in eight years.

• GOLD tumbled 6.2 percent to $1,564.88 an ounce since the end of March, the biggest retreat since the second quarter of 2004. Bullion is little changed this year which compares with an 11 percent slide in the Standard & Poor’s GSCI gauge of 24 commodities and a 1.8 percent advance in the MSCI All-Country World Index of equities. Treasuries returned 2.1 percent, a Bank of America Corp. index shows.

Asian stocks climbed, with the regional benchmark index posting its biggest gain in three weeks, after European leaders meeting in Brussels agreed to ease repayment rules to Spanish banks and make it easier to recapitalize the region’s troubled lenders.

• The MSCI Asia Pacific Index (MXAP) climbed 1.8 percent to 117.03 as of 1:41 p.m. in Tokyo. The gauge fell 12 percent through yesterday from a February high amid concern growth in China and the U.S. is slowing as the euro-zone debt crisis escalates.

European stocks: Two years of losses have pushed European equities toward the lowest valuations ever, prompting fund managers from Invesco Ltd. to JPMorgan Chase & Co. to increase holdings in Spain, Italy and Germany.

• The Stoxx Europe 600 Index (SXXP) for the 17 euro nations has fallen 30 percent since February 2011, wiping about $1.1 trillion from European equities, as Ireland, Portugal, Greece and Cyprus sought rescues after borrowing costs surged. Spain asked for 100 billion euros ($124 billion) to shore up its banks.

U.S. stocks pared losses in the final hour of trading amid speculation European leaders were nearing an agreement to halt contagion from the debt crisis.

• The S&P 500 (SPX) dropped 0.2 percent to 1,329.04 at 4 p.m. New York time, paring a loss of as much as 1.4 percent. The Dow Jones Industrial Average slid 24.75 points, or 0.2 percent, to 12,602.26. Volume for exchange-listed stocks in the U.S. was 6.8 billion shares, about in line with the three-month average.