* Euro hits $1.40 but struggles to stay there
* Australian dollar hits highest since 1983 free float
* Dollar slides to record low vs Swiss franc (Updates prices)
NEW YORK, Oct 13 (Reuters) - The U.S. dollar slipped against most currencies on Wednesday after Federal Reserve meeting minutes released the previous day reinforced expectations of more monetary easing in the United States.
The euro had earlier risen above $1.40 but failed again to hold above that level. Analysts said the risk of a near-term correction in euro/dollar is building, even though investors continue to sell the dollar on any rallies.
Minutes of the Fed's September meeting showed officials thought the struggling U.S. recovery might soon need more help. They discussed ways to provide it, including adopting a price-level target and buying longer-term U.S. government debt. For details, see [ID:nN12188145]
More Fed easing means more cheap dollars in the market and low U.S. rates eroding the return on dollar-denominated assets.
"With the FOMC minutes validating the market's expectations for stimulus in November, investors have jumped back into the market to sell dollars," said Kathy Lien, director of currency research at GFT in New York.
Some analysts said the euro's struggle above $1.40 is a sign that much of the impact from any further Fed easing has been priced in, with the market already very short of dollars.
"For investors to sell the U.S. dollar even further and push (euro/dollar) above $1.40, we need to see additional negative U.S. dollar development, which is currently absent," said Matthew Strauss, senior currency strategist at RBC Capital Markets in Toronto.
In late afternoon trading, the euro rose 0.3 percent to
$1.3962
But the euro failed to hold above $1.40 for the third day in five since hitting an eight-month high of $1.4030 last week. Many analysts note $1.40 as a key resistance level, which draws corporate selling interest as companies repatriate their earnings from Europe.
The euro ran into offers ahead of 1.4000, where option hedging has been reported, strategists at Action Economics wrote to clients.
AUSSIE, SWISSIE AT NEW HIGHS
Technical analysts said the risk of a near-term pullback in the euro is increasing. That could push euro/dollar to $1.3690/40, followed by $1.3490, the 23.6 percent and 38.2 percent retracements of the euro's move higher from September.
But a firm break above $1.4025-45 in euro/dollar, particularly a weekly close above $1.4030, could spark further gains, others said.
The euro may be moving closer to a sell signal on the dollar with the 12- and 26-day moving average convergence divergence line closing on the nine-day signal line, according to Reuters data. The MACD was last at +0.0258, with the signal line at +0.0241.
The MACD is used in technical analysis as an indicator of short-term momentum by focusing on exponential moving averages and closing prices.
The market has gone very short of dollars on easing expectations recently and some analysts say this raises the risk of a rebound, particularly if the Fed opts for a much smaller QE program than the $1 trillion in asset purchases some forecast. [FED/R]
"If the Fed disappoints ... it is possible we could see an unraveling of the euro back down to $1.35s," said Tim O'Sullivan, chief dealer at Forex.com in Bedminster, New Jersey.
The dollar index, which measures the greenback's performance against a six-currency basket, fell 0.4 percent to 77.072 <.DXY>, not far from a nine-month low of 76.906 set last week.
The dollar fell to a record low of 0.9546 Swiss francs
The Australian dollar
The dollar was little changed at 81.74 yen