Euro falls in London

The euro gave up gains on Wednesday, weighed down by comments from a senior German official who watered down some of the optimism building that European leaders will take decisive steps to contain the region's debt crisis at a summit on Friday. Berlin is increasingly pessimistic about the chances of a deal to solve the debt crisis at the summit, because some governments do not seem to grasp the gravity of the situation, a German government official said, speaking on condition of anonymity.
The euro dipped to a session low of $1.3373, triggering reported stop-loss orders below $1.3400 and was last trading at $1.3386, down 0.1 percent on the day. Chartists said trendline support from its November 30 low comes in around $1.3345, a level that could check losses for now.
Despite the slide, the single currency held above the previous session's low near $1.3334. Strategists said investors would be wary of initiating positions ahead of the EU summit and a European Central Bank rate decision on Thursday. The single currency showed little reaction to better-than-expected demand at a five-year German Bund auction that nevertheless soothed some concerns that investors may start shunning the eurozone's strongest economy.
The euro was flat against the Swiss franc at 1.2415 francs. It earlier spiked to around 1.2440 francs after the Swiss finance minister said authorities could even consider negative interest rate and capital control options to curb the franc's strength. The single currency has gained in the past two days after a steep fall in Swiss consumer prices fanned speculation the Swiss National Bank may raise the floor in euro/Swiss.
There was talk of hedge funds buying euro/Swiss franc call options with a strike price at 1.2500 francs that are due to expire in the next week or two. In addition, traders cited talk of a large euro/Swiss franc option barrier at 1.2500 francs. The Australian dollar rose 0.2 percent to $1.0250, supported by data showing Australia's economy grew a brisk 1.0 percent in the third quarter from the previous three months. The dollar held steady versus the yen at 77.72 yen and was up 0.1 percent on a basket of currencies at 78.56.