--Yen slips slightly after Japan's downgrade --Euro steady ahead of leaders' summit Wednesday --Indian rupee, Brazilian real continue to limp against the dollar By Eva Szalay Of DOW JONES NEWSWIRES LONDON (Dow Jones)--The Japanese yen slipped slightly against the dollar Tuesday in European trading hours after Fitch Ratings slashed the country's credit worthiness by two notches. The euro held steady against peers as investors waited for Wednesday's summit of European leaders in Brussels to see if there's a shift in emphasis between pursuing an austerity agenda and following policies more geared towards growth. The dollar jumped a Tuesday high against the yen of Y79.85 from Y79.58 before the announcement Fitch changed Japan's rating to A+ from AA, citing rising public debt ratios and a deteriorating credit profile. The yen continues to enjoy support form global investors seeking shelter from the euro-zone debt crisis and Fitch's decision was seen as isolated by investors. The currency reaction was muted. "There could be some impact if Moody's and S&P follow suit and cut their ratings to A levels," said Takafumi Yamawaki, chief rate strategist at JPMorgan in Tokyo. "I don't think that will happen in the near future." Wednesday's meeting of European Union leaders may highlight French and German differences in how to quell the 17-nation euro zone's debt crisis. It threatens to force Greece, beset by political upheaval and concerns it won't meet conditions for bailout financing from international lenders needed to keep it afloat, from the currency bloc. Francois Hollande, elected this month as France's first socialist president in 17 years, pledges to steer Europe onto a path of growth, diluting the austerity of government spending cuts and restructuring championed by German Chancellor Angela Merkel. "Germany could quickly learn that there is a slow power shift from creditors to debtors taking place," said Morgan Stanley in a research note. The argument for more growth-orientated policies was underlined by the Organization for Economic Cooperation and Development, which cut economic growth forecasts for the euro-zone for both 2012 and 2013. Sterling fell against the greenback and held its own against the euro after U.K. data showed annual inflation slowed more sharply than expected in April to 3.0%, increasing the likelihood of more stimulus from the Bank of England to lift the country's recessionary economy. "The fall gives the [BOE's] Monetary Policy Committee a bit more leeway to undertake further quantitative easing to cushion the U.K. economy from the turmoil in the euro-zone," said research house Capital Economics in a note to clients. Emerging-market currencies were steady in quiet trade. Speculation about Polish central bank intervention persisted and the Indian rupee hit fresh record lows against the dollar. The dollar pushed ahead against the Brazilian real, trading dangerously close to the central bank's 2.05 line in the sand. At 1042 GMT the euro traded at $1.2751 compared with $1.2818 late Monday in New York, according to EBS via CQG. It traded at Y101.60 from Y101.66 and at CHF1.2010 compared with CHF1.2012. The dollar was at Y79.70 from Y79.31 late Monday and it traded at CHF0.9420 compared with CHF0.9374. The pound was trading at $1.5770 from $1.5835. The ICE Dollar Index, which tracks the U.S. dollar against a basket of currencies, was at about 81.315 from 80.936. A summary of key levels for chart-watching technical strategists is below: Forex spot: EUR/USD USD/JPY GBP/USD USD/CHF Spot 1020 GMT 1.2744 79.72 1.5766 0.9422 3 Day Trend Bullish Range Bearish Bearish Weekly Trend Bearish Bearish Bearish Bullish 200 day ma 1.3329 79.71 1.5884 0.9112 3rd Resistance 1.2855 80.38 1.5951 0.9500 2nd Resistance 1.2825 80.18 1.5900 0.9454 1st Resistance 1.2807 79.85 1.5848 0.9438 Pivot* 1.2790 79.27 1.5819 0.9393 1st Support 1.2725 79.45 1.5733 0.9379 2nd Support 1.2702 79.30 1.5618 0.9367 3rd Support 1.2675 79.00 1.5599 0.9345 Forex spot: EUR/GBP Spot 1020 GMT 0.8083 3 Day Trend Bullish Weekly Trend Bearish 200 day ma 0.8391 3rd Resistance 0.8221 2nd Resistance 0.8142 1st Resistance 0.8101 Pivot* 0.8085 1st Support 0.8077 2nd Support 0.8050 3rd Support 0.8005 - By Eva Szalay, Dow Jones Newswires; 44 20 7842 9305; (eva.szalay@dowjones.com) (Francis Bray, Laura Clarke and Megumi Fujikawa contributed to this article.)

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