* Euro slips, cuts previous day's rally as EU summit awaited
* Speculation swirls of fiscal assistance plan for Greece
* Greek plan may boost euro, but risk aversion remains
(Updates throughout; previous TOKYO)
By Naomi Tajitsu
LONDON, Feb 10 (Reuters) - The euro slipped on Wednesday, relinquishing some gains made the previous day as the market braced for a European Union summit, speculating that member countries may help Greece tackle its fiscal problems.
Comments from a senior German coalition source that European governments had agreed in principle to support heavily indebted Greece had helped the euro to rally on Tuesday.
But the common European currency failed to make additional headway as concerns about the fiscal positions of several euro zone nations kept investors wary of taking on big positions in before the meeting on Thursday.
Euro losses were limited as the government bond yield spreads between Greece and Germany -- considered by far the safest of euro zone debt -- continued to narrow, suggesting that concerns about Greece may be fading slightly.
Analysts said the currency market wanted to see whether a concrete plan for Greece would materialise at the summit, and that the euro may benefit if periphery spreads contract more.
"The market will be very volatile, depending on if there is a package and if so, what that will be and how the market thinks it will impact the narrowing of spreads," said Marcus Hettinger, global currency strategist at Credit Suisse in Zurich.
"If the recent widening of the periphery spreads stops or if they narrow, that should be positive for the euro given the market is extremely short (on the currency)."
The euro has earned a slight reprieve this week after enduring a pounding as ballooning debts not only in Athens but also Portugal and Spain have highlighted the dismal financial positions of some euro zone members, undermining stability in the 16-nation bloc.
By 0821 GMT, the euro had slipped 0.2 percent on the day to $1.3760, edging down from the day's high of $1.3807, according to Reuters data.
It had rallied as high as around $1.3840 on Tuesday, climbing a full percent on the day to post its best daily percentage gain since November 2009 and pulling further away from an 8 1/2-month trough around $1.3580 hit last week.
Against the yen it was down 0.1 percent at 123.46 yen as traders took a breather after pushing the euro up roughly 1.5 percent the previous day, its biggest one-day gain since October 2009.
Some market participants questioned the wisdom of buying up the euro at this stage, as aid for Greece could lead to similar measures for the other struggling euro zone economies like Spain and Portugal.
"This still means a burden to the region and possibly puts a constraint on the ECB's monetary policy and pace of withdrawal of liquidity injection," said a trader at a European bank in Hong Kong. "Fundamentally, Europe will likely remain a laggard, underperforming the U.S."
High-yielding currencies including the Australian and New Zealand dollars slipped, and the dollar was slightly higher against a currency basket at 79.916 as investors remained somewhat risk averse ahead of Thursday's meeting.
The market also awaited comments by Federal Reserve Chairman Ben Bernanke who is expected on Wednesday to outline the Fed's strategy for tightening. The prepared testimony will be released at 1500 GMT, even though the congressional hearing has been postponed.
(Additional reporting by Tokyo Forex Team; Editing by Ruth Pitchford)