Euro slips in London

The euro slipped versus the dollar on Tuesday, pausing from a rally spurred by expectations of a euro zone interest rate rise and raising the possibility of a downward correction on concerns about euro zone debt problems. The dollar jumped as much as 1 percent against the Swiss franc while the euro lost steam after rallying to a four-month high above $1.40 on expectations the European Central Bank may raise interest rates next month.
Near-term support is seen at $1.3862, the previous three-month peak hit in early February. With a euro zone rate rise in April largely priced in and positioning data showing currency speculators have ramped up their long euro positions, some in the market say the euro is ripe for a short-term correction.
The euro fell 0.4 percent to $1.3905, extending a retreat from a four-month high around $1.4036 hit on Monday. Traders said stop-loss orders were triggered on the break of $1.3940 and $1.3925, with more reported at $1.3885. Following a break of the $1.3862 February peak, the next technical level was $1.3830, the low hit on Thursday before ECB President Jean-Claude Trichet's hawkish comments at a news conference after a policy meeting. Below there, the euro could be heading towards $1.35.
Oil prices stabilised on Tuesday after Kuwait's oil minister said Opec was in talks to boost oil production, although concerns remained about possible further disruptions in oil supplies due to unrest in the Middle East and North Africa.Analysts said this triggered selling in the Swiss franc, with traders also citing franc selling by Middle Eastern names.
The dollar jumped as much as 1 percent against the Swiss franc to 0.9354 francs, before pulling back to 0.9326 by 1236 GMT. The euro traded at 1.2969 francs, having hit a two-week high of 1.3040 francs. A weaker franc and euro helped prod the dollar up 0.4 percent against a currency basket to 76.779. The index hovered above 76.40, where key trendline support dating back to March 2008 lay.