The euro rose against the dollar as concern the economic recovery may be faltering in the world’s biggest economy damped demand for the U.S. currency as a refuge. The euro strengthened against all but one of its 16 most- traded peers before data today that will show U.S. house builders turned the most pessimistic in four months in July. The yen weakened after Dow Jones Newswires reported the Bank of Japan may take steps to ease monetary policy should the currency stay around 85 per dollar. The Hungarian forint fell after the International Monetary Fund and European Union ended talks with the government without endorsing Prime Minister Viktor Orban’s plans to control the budget deficit. “Market focus has shifted away from the debt crisis to concerns about the U.S. economic recovery,” said Lutz Karpowitz, a senior currency strategist at Commerzbank AG in Frankfurt. The euro gained 0.3 percent to $1.2965 as of 6:23 a.m. in New York, after earlier dropping to $1.2871. It reached $1.3008 on July 16, the strongest level since May 10. The single currency climbed 0.7 percent versus the Japanese yen to 112.75. The euro appreciated 0.4 percent to 84.82 U.K. pence. Japan’s currency weakened versus 13 of 16 most actively traded counterparts as the Dow report cited people familiar with the deliberations of officials at the central bank. ----------Yen Weakness “The yen’s weakness stemmed from the article,” said Derek Halpenny, European head of currency research at Bank of Tokyo- Mitsubishi UFJ Ltd. in London. “Comparisons are being made to November last year, when dollar-yen hit its low below 85 and around that time the BOJ announced its three-month lending facility to financial institutions. There’s no talk of intervention in the market, but rather of policy measures.” The dollar fell against the euro in the past month as negative data surprises out of the U.S. compared unfavorably with positive data surprises from the euro region, according to Deutsche Bank AG’s Jim Reid. “On this measure, U.S. data has fallen off a cliff relative to expectations in recent weeks,” Reid said in an e- mailed report Monday. “The euro-area data hasn’t been as negative relative to expectations. This perhaps explains the recent strength of the euro and the change in focus from EU problems to U.S. data.” ------------Economic surprises U.S. economic data has delivered negatives surprises since June 10, falling to minus 33.5 last week, according to an index compiled by Citigroup Inc. Euro-region data has given positive surprise reading since April 16, and was at positive 44.3, the index shows. The euro weakened earlier after Moody’s Investors Service cut Ireland’s credit ranking on level to Aa2, citing a “significant loss of financial strength” and the cost of bank bailouts. Moody’s also lowered its rating on Ireland’s so-called bad bank, the National Asset Management Agency to Aa2, with a stable outlook. Hungary’s forint declined for a second day versus the dollar and dropped to its weakest level against the euro since June 7, days after comments by local politicians comparing Hungary to Greece roiled world markets. ---------Forint drops The IMF said in a July 17 statement it ended its review of Hungary’s 20 billion-euro emergency bailout because “a range of issues remain open.” The currency fell as low as 225.21 per dollar, before trading at 222.03. It depreciated as much as 2.9 percent to 290.20 against the euro, before trading at 287.75. “The lack of agreement in talks with the IMF and EU is likely to further unsettle the Hungarian forint,” said Greg Gibbs, a currency strategist at Royal Bank of Scotland Group Plc in Sydney. “It could be a factor that keeps risk appetite low to start this week.” The New Zealand dollar fell for a second day against the greenback as traders cut bets on the amount of interest-rate increases the central bank will make as the growth outlook worsens. The so-called kiwi weakened after the Labor Department said the jobless rate is likely to “remain elevated” over coming quarters. (Source:Bloomberg)