The euro reversed its gain against the dollar today after approaching the high end of the $1.53-$1.5850 range in which it has traded in June, according to Alan Ruskin, head of international currency strategy in North America atRBS Greenwich Capital Markets Inc. in Greenwich, Connecticut.
``We have reached the top of the recent range,'' said Ruskin. ``People don't want to get carried away too much before the European Central Bank meeting this week.''
The ECB is expected by economists to raise its 4 percent main refinancing rate by a quarter-percentage point on July 3, the same day a government report is forecast to show the U.S. lost jobs in June for a sixth month.
The inflation rate in the countries that use the euro accelerated to 4 percent, from 3.6 percent in May, the EU statistics office in Luxembourg said. The ECB tries to keep consumer-price growth below 2 percent.
``There's a lot of trepidation about how the payrolls and the ECB rhetoric will play out,'' said Stephen Malyon, co-head of currency strategy at Scotia Capital Inc. in Toronto. ``The downside risk to the U.S. economy is growing. That's something that unnerves the market.''
Futures on the Chicago Board of Trade show a 25 percent chance that the Federal Reserve will raise the 2 percent target rate for overnight lending between banks by a quarter-percentage point on Aug. 5, compared with 40 percent odds a week ago.
``The sentiment is negative for growth in the U.S.,'' said Benedikt Germanier, a currency strategist at UBS AG in Stamford, Connecticut. ``I would play the weak dollar through the yen. The stress of the financial markets will keep the safe-haven currencies, such as the yen and the Swiss franc, supported.''
The Chicago PMI, a regional read on manufacturing, rose to 49.6 from 49.1 in the previous month, versus forecasts for a dip to 48. However, any reading below 50 indicates continued weakness in the sector.

Japan Stocks Fall on Stronger Yen; Oil, Mining Companies Jump
Japan's stocks fell to the lowest in more than two months after a stronger yen clouded earnings prospects for makers of electronics and cars. Oil explorers and mining companies advanced as commodities prices rose.
Fuji Heavy Industries Ltd., the maker of Subaru cars, led a decline by automakers, while Sony Corp. fell to the lowest in almost two months as the Japanese currency climbed to a three- week high. Nippon Oil Corp. and Nippon Mining Holdings Inc., Japan's largest copper producer, surged.
The Nikkei lost 6 percent this month and 12 percent so far this year, its worst first half since 1995. The Topix slumped 6.3 percent in June and 11 percent on the year.
The yen strengthened to as much as 105.88, a level not seen since June 6, from 107.09 when Japanese stock trading ended on June 27. Moody's Investors Service raised Japan's local-currency debt rating at midday, sending the Japanese currency higher and helping reverse a 0.8 percent gain in the Topix. A stronger yen decreases the value of overseas sales of Japanese companies.
Fuji Heavy tumbled 4.6 percent to 520 yen, the sharpest drop since March 17, while Sony, which derives a quarter of its sales from the U.S., sank 4.1 percent to 4,640 yen, the lowest since May 9. Hino Motors Ltd., which today said it will raise prices on trucks for the first time in almost 17 years, slid 1.8 percent.
Nippon Oil, which develops oil fields in the North Sea, leapt 7.4 percent to 713 yen, making it the second-biggest winner on the MSCI World Index. Nippon Mining jumped 3.6 percent to 665 yen, while Mitsubishi Corp., a trading company that derives half its profit from commodities, added 3.2 percent to 3,500 yen.
Tokyo Electric Power Co., Asia's largest utility, climbed 3.8 percent to 2,730 yen, the sharpest jump since Jan. 25. Kansai Electric Power Co. added 3.8 percent and Tohoku Electric Power Co. surged 5 percent. A gauge tracking utilities had its biggest gain since April 1.
Tokyo Electric may raise electricity rates in January to cope with higher fuel prices, President Masataka Shimizu said on June 26, sending the shares up the following day. Kansai Electric and other utilities may follow in raising consumer prices, Kyodo News reported on June 27.
Sony Financial Holdings Inc., which provides insurance and online banking, tumbled 4 percent to 427,000 yen, while Millea Holdings Inc., Japan's largest insurance company by market value, dropped 2.6 percent to 4,140 yen. The Topix Insurance Index was the biggest decliner among 33 industry groups, falling to its lowest since April 24.
The yield on Japan's 10-year government bond fell to as much as 1.585 percent today, the lowest since May 13. Japanese insurers have large holdings of government bonds, and lower yields decrease their returns. Government securities make up more than a fifth of Millea's assets, according to the company.

European Stocks Rise, Led by BP, Anglo American, France Telecom
BP Plc and Anglo American Plc climbed after crude topped $143 a barrel and gold had its fourth straight quarterly gain. Nestle SA, the world's biggest food company, and Roche Holding AG, the largest maker of cancer medicines, led an advance by companies whose earnings are less tied to the pace of economic growth. France Telecom SA rallied after Europe's third-biggest telephone company ended its bid for TeliaSonera AB.
Record oil ``is a boon for energy companies,'' said Franz Wenzel, Paris-based deputy director for investment strategy at AXA Investment Managers, which oversees about $831 billion. We're also ``saying play the defensives. We see the possibility to pass on the inflation burden to the consumer,'' he said.
More than $9.2 trillion was erased from equity markets worldwide this year through last week as $400 billion in bank credit-related losses and oil at all-time highs offset efforts by central banks to bolster confidence in financial markets.
Inflation in Europe accelerated more than economists forecast this month to 4 percent, the highest in more than 16 years, the European Union statistics office said today.
European Central Bank President Jean-Claude Trichet this month signaled the ECB may raise rates as soon as this week. The Fed on June 25 kept rates on hold, saying ``upside risks'' to prices have increased.
BP, Europe's second-largest oil company, gained 3.2 percent to 583.25 pence. Total SA, the region's biggest refiner, increased 2.4 percent to 54.20 euros.
Anglo American, the world's second-biggest mining company, added 3.8 percent to 3,526 pence. BHP Billiton Ltd., the third- largest, rose 2.4 percent to 1,920 pence.
Earnings momentum for European pharmaceutical companies will continue, Gbola Amusa, a London-based analyst at UBS AG, wrote in a report to clients.
France Telecom jumped 7.2 percent to 18.71 euros. The French company withdrew its unsolicited bid to buy TeliaSonera for 244 billion kronor ($40.8 billion) after the Swedish company rejected the offer as too low.
Societe Generale SA raised its recommendation on France Telecom to ``buy'' from ``hold,'' saying withdrawing its takeover bid should ``reassure investors as to the group's prudent financial approach to mergers and acquisitions.''
Holcim Ltd. sank 1.3 percent to 82.75 francs. Exane BNP Paribas downgraded the world's second-largest cement maker on concern demand will slow, cutting its recommendation to ``neutral'' from ``outperform.''
Kingspan Group Plc sank 2.9 percent to 6.167 euros. Europe's largest maker of flooring and insulation panels was also lowered to ``neutral'' from ``outperform'' at Exane. Imerys SA dropped 4.2 percent to 46.01 euros. The world's biggest producer of minerals used to whiten paper and add colors to paint had its recommendation lowered to ``underperform'' from ``neutral.''
``Construction leading indicators have continued to decline in the U.S. and most West European countries and imply a further fall in demand for building materials in 2009,'' the brokerage wrote in a note.

Most U.S. stocks fell for a third day, capping the market's worst month in six years, on concern that deepening mortgage losses will force more banks to cut dividends or sell shares at a discount.
Wachovia Corp. tumbled to the lowest since 1992 after an analyst said the lender may cut its payout, while Merrill Lynch & Co. and Citigroup Inc. dropped as JPMorgan Chase & Co. said prices for some mortgage securities may sink further. Lehman Brothers Holdings Inc. plunged as traders speculated the fourth- largest U.S. securities firm may be sold for less than its market value. Devon Energy Corp. led gains in oil producers, which sent the Standard & Poor's 500 Index and Dow Jones Industrial Average higher, after analysts increased profit estimates through 2009.
Three stocks dropped for every two that rose on the New York Stock Exchange. The S&P 500 increased 1.62 points, or 0.1 percent, to 1,280, paring its retreat this month to 8.6 percent. The Dow added 3.5 to 11,350.01. The Nasdaq Composite Index lost 22.65, or 1 percent, to 2,292.98.