Euro slips in Asia

The euro dipped against the dollar on Tuesday, having eased off the previous day's three-week high, with the focus on whether a Franco-German summit will lay the groundwork for further measures to help quell the eurozone's sovereign debt crisis. The euro clung to much of the gains it made on Monday, when it rose roughly 1.3 percent, cheered by news the European Central Bank spent a record 22 billion euros on government debt last week, and signs of stabilisation in equity markets.
The single currency faces a crucial test on charts at levels just under $1.45. Trendline resistance drawn off peaks hit in early June and late July comes in roughly around $1.4470 to $1.4480. A breach of those levels may set the euro up for more gains, but a failure to break above the resistance could bode ill for the single currency.
Market players said the euro could draw support if Sarkozy and Merkel hint at the possibility of eurobond issuance. Still, even such a plan may not be a panacea for the eurozone's sovereign debt woes. "Some further clarification on the eurobond issue would undoubtedly be positive for the euro, but that's still about the safety net, and not the fundamental reasons behind the debt crisis," said Teppei Ino, a currency analyst at Bank of Tokyo-Mitsubishi UFJ in Tokyo.
The euro dipped 0.2 percent to $1.4418. It had risen to a high near $1.4477 on Monday, its highest in nearly three weeks. Traders cited stop-loss euro sell orders at $1.4400. There was also talk of more stop-loss offers below that level. On the upside, stop-loss euro bids were said to be lurking near $1.4500 and $1.4550. Market players were sceptical that any major initiatives would be announced at Tuesday's summit.
The euro dipped 0.4 percent against the Swiss franc to 1.1280, giving back some of the gains it made on Monday, when it surged roughly 2.3 percent. The Swiss franc had slid against the dollar and the euro on Monday on speculation the Swiss National Bank may soon take further action to curb gains in the currency by setting an exchange-rate target.
Such speculation gained ground after Swiss newspaper SonntagsZeitung reported on Sunday the central bank was poised to set a target at a little over 1.10 francs per euro. The dollar fell 0.3 percent against the Swiss franc to 0.7822 franc, but remained well above a record low of 0.70676 hit last week on trading platform EBS.
The heightened speculation that the Swiss National Bank could set a target level for the Swiss franc versus the euro comes after the SNB surprised markets earlier in August by cutting its interest rate target down close to zero. The dollar held steady against the yen at 76.88 yen, having dropped back to levels seen before Japan's record yen-selling intervention on August 4, and hovering near a record low of 76.25 yen hit in March.