The second EU summit in four days seems unlikely to produce a detailed plan despite assurances from France and Germany of a "comprehensive solution" to the region's fiscal problems. According to a draft statement from a leaders' meeting in Brussels on Wednesday, European Union governments will signal readiness to back banks with guarantees to avert a credit freeze but give no overall figure for recapitalizing lenders. "The market is finally grabbing on to the reality that we're not going to see definitive hard numbers," said Richard Franulovich, senior currency strategist, at Westpac Securities in New York. "I am positioning for a disappointment. If we take out $1.38, then we're going down to $1.35." Earlier the euro rose against the dollar after Germany's lower house of parliament approved a motion to strengthen the euro zone rescue fund through leveraging, providing Chancellor Angela Merkel with the mandate she needs to negotiate at the European summit in Brussels. But that optimism waned quickly. In midday trading, the euro was last down 0.6 percent at $1.38269, well off the session peak of $1.39761 on trading platform EBS but above the session low of $1.37980. Investors have been expecting the EU to adopt a plan to reduce Greece's debt burden, recapitalize European banks to help absorb bond losses and strengthen the euro zone rescue fund, the European Financial Stability Facility, to stave off contagion in the bond market. But differences remain over the extent of losses that private holders of Greek bonds would have to incur and the size of a planned bank recapitalization, while the scope for leveraging the bailout fund is also uncertain. "The market was anticipating an outcome to resolve at least temporarily some of the issues, we saw that immediately after the German vote," said John McCarthy, director of foreign exchange at ING Capital Markets in New York. "Then there are reports they are still deadlocking on the 'haircuts,' and we have seen the euro tumble." The euro's decline came despite a lifeline from the incoming head of the European Central Bank, Mario Draghi, who signaled the bank would go on buying troubled states' bonds to combat market turmoil. YEN-INTERVENTION WATCH The dollar, meanwhile, set a record low against the yen, keeping alive the risk of intervention by Japanese authorities, with hedge funds building bearish bets on the greenback. The greenback fell to 75.709 yen on EBS. Reflecting the risk of further yen strength, Action Economics said there is increasing interest for short-dated dollar/yen strikes from 75.00 to 74.00. The 75.00-yen area is where long-term leveraged exotic structures and retail margin call orders are noted and a breach could see significant yen demand, the research firm said. The dollar was last down 0.1 percent at 76.020 yen. Japan's central bank is likely to debate easing monetary policy further at a meeting on Thursday, sources said. The Australian dollar was down 0.8 percent at US$1.0343 after Australia's underlying inflation data came in below expectations, increasing the chances of a rate cut