The euro fell against 12 of its 16 most-traded counterparts officials disagreed on how to end the crisis of sovereign debt before next week's summit of EU leaders.

The single currency posted its biggest decline against the Norwegian krone and the New Zealand dollar. The Australian dollar headed for a weekly decline of speculation that China will tighten monetary policy. France yesterday backed Germany to refuse to add to 440 EU million euros (581 billion U.S. dollars) bailout fund and bonds decline sets in the euro zone.

The opposition "will probably scupper the idea of e-bond and probably would be taken very negatively by the markets, so we could see the euro under pressure again," said Ian Stannard, currency strategist at BNP Paribas SA London.

The euro was created by a fall of 1.3 percent against the dollar this week. Was changed to $ 1.3239 at 7:04 am in New York. Touched $ 1.3165 yesterday, the lowest since 02 December. The common currency was 0.6 percent weaker against the crown 7.9460 and fell 0.3 percent to 110.56 yen.

German Chancellor Angela Merkel and French President Nicolas Sarkozy, are holding talks in Germany today. With the euro zone's two largest economies in excavation over new measures to stem the debt crisis in Europe, the EU leaders met next week may be difficult to give financial markets a breather.

European Central Bank Vice President Vitor Constancio late yesterday marked the European governments should be prepared to increase the size and flexibility of its rescue fund like the ECB urges leaders to do more to fight the fiscal crisis.

"More flexibility '

Asked whether the fund could be used to purchase government bonds, Constancio said in an interview on Television that "more flexibility in the euro zone resources would be helpful."

government bonds fell Spanish and Italian, increased demand for extra yield investors to maintain the reference values instead of German bonds, amid concern about the costs of government borrowing and debt increase in sales next week.

The euro may fall as low as 108 yen should break below key support level against the Japanese currency, Societe Generale SA, said, citing technical indicators in a research note today. A support level is an area in a chart technical analysts foresee a currency purchase orders and related instruments. The stronger the support, the sale will need more than a drop below that level.

The Australian dollar is set for a weekly decline of inflation concerns China tomorrow will copy the data in the case of the Asian nation to tighten monetary policy. Australia's currency was at 98.85 U.S. cents from 98.37 cents, set for a fall of 0.4 percent this week.

China Price

Consumer prices in China rose 4.7 percent in November from the previous year, a report tomorrow will show statistics, according to the median forecast in a survey of economists. That would be the fastest pace since August 2008. The Economic Information Daily, said the figure may be 5.1 percent.

"The danger is China raises interest rates sharply, causing a hard landing of China's economy, which obviously would harm Australia's exports," said Derek Mumford, a Sydney-based director in Richford Capital, one of the exchange rate and strong rates of risk management. "This is holding back the Australian dollar."

The "window" to China's central bank to raise borrowing costs could be this weekend, according to a report in China Securities Journal this week.