* Euro slips to 3-week low vs dollar, stung by Greece woes
* Market awaits EU summit to see if Athens can secure aid
* Traders shun risk, high-yielding FX slip
(Adds comment, updates throughout; previous TOKYO)
By Naomi Tajitsu
LONDON, March 22 (Reuters) - The euro slumped to a three-week low against the dollar on Monday, pressured by uncertainty about whether Greece would be able to secure aid this week to help service its ballooning debts.
Traders were jittery ahead of this week's summit of European Union leaders, while India's surprise rate rise last week stung commodity currencies, keeping risk appetite low and prodding the safe-haven dollar to a two-week high against a currency basket.
European leaders sent out conflicting signals at the weekend over aid to Greece, with Germany urging Athens to solve its debt problems alone while Italy strongly backing EU support. EU leaders will meet on March 25-26. [ID:nLDE62K0C9]
"It seems there's agreement there will be some sort of assistance to Greece, but it's not clear what form that will take," said Carl Hammer, currency strategist at SEB in Stockholm, adding that this would keep the euro under selling pressure.
Splits within the EU over how to help deal with Greece's debt problems have called into question the effectiveness of the euro system as a whole which has prompted a sell-off in the single currency, knocking it down 10 percent since December. By 0840 GMT, the euro had slipped 0.2 percent to $1.3498, its weakest since March 2.
It traded around 1.4340 Swiss francs <EURCHF=>, teetering near a 17-month low of 1.4318 hit late last week, and touched its lowest in over a week against the yen around 122.18 yen <EURJPY=R>.
Weakness in the euro helped the dollar index <.DXY> which tracks the U.S. currency's value against a currency basket, to edge up around 0.2 percent to 80.966, also its highest since the start of the month.
The dollar remained rangebound versus the yen at 90.50 <JPY=>, with support around 89.75 and resistance just over 91.00 yen.
The Australian and New Zealand dollars each slipped 0.3 percent against their U.S. counterpart as European shares <.FTEU3> fell 0.7 percent, following Asian markets lower.
The commodity-linked currencies, which are also considered to be higher-risk, continued to smart from Friday's surprise rise in interest rates from India. [ID:nSGE62I0HP]
European leaders meet on March 25 and 26. Greece said at the weekend it could go without borrowing until the end of April but is pressing its EU partners for a concrete standby package to help bring its borrowing costs down. [ID:nLDE62K0M6]
Analysts at JPMorgan suspect the Greeks want a sufficiently clear proposal from the rest of the region to encourage a significant narrowing of spreads ahead of the refinancing that needs to be done over the next couple of months.
"This brinkmanship between Greece and the rest of the region is likely to come to a head this week," they wrote in a note to clients. "If the rest of the region does not propose something that is acceptable to the Greeks at this summit, then the Greeks may well go to the IMF."
Analysts expected such uncertainty to keep the euro weak, even as data from the Commodity Futures Trading Commission showed speculators' net short positions on the euro fell to 46,341 contracts last week from 74,551 the week before. [IMM/FX]
Final approval of healthcare reform by the U.S. House of Representatives saw little immediate dollar reaction.
But currency players continued to watch a spat between Washington and Beijing over the yuan, with China's Commerce Minister saying it would retaliate if the U.S. labelled it a currency manipulator. [ID:nSGE62K02X] [ID:nN20178881] (Additional reporting by Charlotte Cooper in Tokyo, editing by Mike Peacock)