Euro slips in London

The euro slipped against the dollar on Wednesday as investors who bought the single currency following a vote of confidence in the Greek government took profits, signalling market concerns that the eurozone debt crisis is far from over. Sterling also fell, tumbling to $1.6123 against the dollar and failing to gain against a broadly weak euro after Bank of England minutes showed policymakers raised the possibility of future quantitative easing.
The euro dropped 0.3 percent to $1.4366, well below the high of $1.4435 reached after the Greek vote while peripheral eurozone bonds spreads widened over German Bunds. Traders cited upside barriers at around $1.4440-50 and said stop-loss orders were seen around $1.4340, just below support at the base of the cloud on the daily Ichimoku chart, a technical analysis tool popular among traders.
A Federal Reserve meeting later in the session, where Chairman Ben Bernake is expected to reiterate a dovish stance, could support the euro but analysts said it was vulnerable to a sell-off in light of Greek uncertainty. "There was an initial knee-jerk reaction but a lot of people now perceive the confidence vote overnight as nothing more than a stop gap measure," said Adam Myers, FX strategist at Credit Agricole. The Greek cabinet is due to meet at 1300 GMT to approve a new austerity package, ahead of Papandreou attending an EU summit on Thursday in Brussels that investors will keep a close eye on for any signs of progress.
"In particular, investors will be looking for indications that the European heads of states have finally overcome their differences and stand ready to ratify the extension of the scope and scale of the eurozone bailout facilities - the EFSF and the ESM," Citi analysts said in a note.
The dollar index, which tracks the greenback's performance against a basket of major currencies, stood at 74.809, well off last week's peak of 76.015. Against the yen the dollar was last down 0.1 percent at 80.22 yen, with traders citing Japanese investor bids down to 79.50 yen and offers from Japanese exporters above 80.50 yen.