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The euro edged higher against the dollar on Tuesday as the arrest of a slide in Chinese shares boosted risk appetite, but its gains were limited by uncertainty over whether officials will agree to beef up a euro zone safety fund this week.
The euro dipped initially but later pared its losses against the dollar as Chinese shares showed signs of stabilising after the previous day's 3 percent slide, lending some support to risky assets.
Euro zone finance ministers met on Monday but made no firm decision about possible additional crisis measures, turning market attention to the Ecofin meeting of European Union finance ministers due to be held later on Tuesday.
"What indications we have heard from European officials over the past several days is that they just don't feel the same sense of urgency that the market does," said Todd Elmer, currency strategist with Citi. "I think for the time being that means the euro is likely to trade lower," Elmer said, adding that the euro could dip back towards $1.30 in coming weeks.
Europe's safety net fund can borrow on the market with euro zone government guarantees of up to 440 billion euros, but analysts say a new package of measures to tackle the crisis is both essential and urgent.
The euro also edged higher against the Australian dollar but eased on other crosses.
The euro's recent failure to break above its mid-December peak of $1.3500 suggests that the single currency may remain stuck in its range seen over the past month of $1.3500 to $1.2860.
Immediate support is seen in the $1.3230 area, a level representing the 38.2% retracement of last week's 4% rally.
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