* US dollar up as euro fails to break $1.4000
* UK GDP lifts pound; Swedish crown falls on Riksbank
* Yen up; Japan finmin says to take steps on FX if needed
(Updates prices, adds detail, adds comment)
NEW YORK, Oct 26 (Reuters) - The U.S. dollar rose as the euro again failed to hold above the $1.4000 level in the prior session leaving investors wary of betting against the greenback on Tuesday.
The Swedish crown and sterling were also actively traded after the Swedish central bank, which raised interest rates as expected, said future rate increases would be more gradual than expected, [ID:nLDE69P0NR] while the British economy grew more than expected.
Overall however, uncertainty over the extent of quantitative easing measures the Federal Reserve may take next week kept foreign exchange trading in predictable ranges.
Euro/dollar "has struggled to break sustainably above $1.40," said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto.
"We still expect this will be the next move, however if it is unable to do so soon, we might see some temporary weakness before markets have enough conviction to push it above this level," she said.
Midway through the New York session, the euro fell 0.7
percent to $1.3860
The euro fell to a session low after a report showed U.S. consumer confidence rose slightly in October but then recovered though it was still down on the day. [ID:nN26128177].
The move back below $1.4000 was viewed as significant given the euro had failed several times in recent days to break through and hold that level.
"I haven't heard that $1.40 is any more significant than any other number," said Tom Levinson, FX strategist at ING in London. "From the fundamental perspective the market mayu want to wait for the Fed and until third quarter GDP numbers are out."
The market expects the Fed to opt for more quantitative easing at its policy meeting next week, but some easing is seen priced into an already weak dollar. How much easing the Fed decides on and how gradually it will implement is uncertain, keeping investors edgy about building more bearish bets on the dollar.
The advance release of U.S. third quarter gross domestic product data is on Friday.
Should the euro break through $1.4000, resistance comes at $1.4442 which is the 78.6 percent retracement of the move from the $1.5141 high in November 2009 to the $1.1876 low in June 2010 said Dean Malone said Dean Malone, a currency director at Compass FX in Dallas, Texas.
Large option barriers, including a one-touch option barrier at $1.4215 that is set to expire on Wednesday may also mute euro/dollar gains until expiration.
15-YEAR LOW
The dollar rose against the yen, edging away from 15-year lows after Japan's finance minister Yoshihiko Noda warned the government would "act decisively" in currency markets if needed. [ID:nTOE69O09F]
His comments pushed the greenback back above 81 yen, with traders citing buying from Japanese life insurers and banks, among others, on the view that Japan may intervene if the dollar nears 80.00 yen.
"Japan has pointed out quite clearly that they will intervene in dollar/yen if it falls too quickly and the market is aware there is no easy one-way bet on dollar/yen downside," said Stephan Maier, currency strategist at Unicredit in Milan.
The dollar was up 0.6 percent at 81.24 yen
Against a basket of currencies <.DXY> the dollar was up 0.6 percent at 77.552. It has support around 76.00-10, just below its October 15 low of 76.144 while resistance is at 78.40.
Sterling was a clear outperformer, rising to a one-week
high at $1.5897
The Swedish crown fell broadly with the euro rising more
than 1 percent to a peak of 9.3414 crowns