The euro weakened against most major counterparts amid signs of division among European governments

The euro weakened against most major counterparts amid signs of division among European governments on how to contain the crisis in the region of the debt.

The common currency weakened for a third day against the dollar before European Union leaders attending a summit on December 16 and 17, with Italy, Belgium and Luxembourg for euro-zone bonds, while Germany and France oppose the idea. The dollar strengthened to a report tomorrow may show the U.S. retail sales rose for the fifth month.

"The policy concern before the crucial meeting this week of work against the euro," said Ian Stannard, currency strategist at BNP Paribas SA in London. "There is a clear division between the smaller nations of the region and Germany and France, and posed a series of questions about the future of the euro."

The euro fell to $ 1.3211 as of 7:30 am in London from $ 1.3226 on 10 December. The 16-nation currency was little changed against the yen at 111.08 yen. The dollar was at 84.13 yen from 83.95 yen.

The euro has fallen 9.6 percent this year, a measure of the currencies of 10 developed countries, according to indexes of correlation-weighted currencies. The yen has gained 11 percent, while the dollar has fallen by 1 percent.

EU Summit

the survival of the euro is "not negotiable", that require monitoring of the budget and closer economic cooperation to overcome the "structural weaknesses" in the euro area, German Chancellor Angela Merkel and French President Nicolas Sarkozy said 10 December. Joint bond was discarded and rejected any increase in the size of a rescue fund set up in May.

"For the euro, the focus will be on the EU summit and if a new mechanism for dealing with sovereign debt problems is agreed," wrote John Kyriakopoulos, head of currency strategy at National Australia Bank Ltd. in Sydney a research note today.

Futures traders increased bets that the euro will weaken against the U.S. dollar, figures from the Washington-based Commodity Futures Trading Commission showed on Dec. 10.

The difference in the number of wagers by hedge funds and other large speculators on a decline in the euro compared with a gain - so-called net shorts - more than double to 15,290 on December 7 from a week earlier.

The dollar index, which tracks the greenback against the currencies of six major U.S. trading partners, including the euro, yen and pound, 0.2 percent, to 80,223 today, advancing for the sixth consecutive day, the longest streak since June.

U.S. Data

U.S. sales retail rose 0.6 percent in November after advancing 1.2 percent in October, according to the median estimate of economists surveyed by us before tomorrow's Commerce Department figures. Confidence among U.S. consumers increased in December to a maximum of six months, the Thomson Reuters / University of Michigan preliminary index of consumer confidence showed on December 10.

The dollar rose last week after President Barack Obama said he would accept lower rates of income tax high earners, dividends, capital gains and multimillion dollar properties for the next two years in exchange for extending the federal unemployment insurance and a one-year reduction in payroll taxes.

"If we can get from the tax agreement, that is something that supports the need for greater efficiency and attractiveness of the dollar", said Robert Rennie, chief currency research in Sydney at Westpac Banking Corp.

The yield on the benchmark 10-year Treasury rose to 3.38 percent today, the highest since June. The Federal Reserve is set to hold a policy meeting tomorrow, as it continues buying treasury bonds to boost the economy.