The euro declined against the other major currencies in European deals on Wednesday, after a media report that the European Central Bank is mulling the implementation of a two-tier charge on banks parking their cash with the ECB and widen its bond buying program.

The ECB officials considered various options, including the buying of bonds of towns and regions, as well as charging a two-tier penalty on banks amassing money with the ECB, Reuters reported. They even discussed the purchase of rebundled loans at risk of non-payment in preparatory meetings, although such a measure looks unlikely for the time being, it added.

In its latest Financial Stability Review, the European Central Bank warned that vulnerabilities arising from from emerging markets are creating challenges to financial market.

Uncertainty over Chinese growth prospectus could still impact financial market stability, given its growing role in the world economy, it noted.

"Debt sustainability challenges remain for euro area sovereigns, in particular on account of the downside risks to the economic outlook coming from higher macro-financial vulnerabilities in some emerging economies," the ECB cautioned.

The ECB has not yet made decision on stepping up bond-buying program or other monetary tools, Vice President Vitor Constancio said.

"No decision has been made; we are analyzing; we are waiting for staff projections which are an important input for the decision," he told reporters.

The euro showed mixed performance in Asian deals. The euro was modestly up against the greenback and the franc but was steady against the pound and the yen.

In European trading, the European currency declined to a 7-month low of 129.84 against the yen and a 7-1/2-month low of 1.0588 versus the greenback, coming off from its early high of 130.76 and 5-day high of 1.0689, respectively. The euro is seen finding support around 1.046 against the greenback and 129.00 against the yen.

The single currency fell to a 5-month low of 1.6132 versus the kiwi, more than 4-month low of 1.4094 against the loonie and near a 5-month low of 1.4587 against the aussie, reversing from its prior highs of 1.6261, 1.4209 and 1.4698, respectively. If the euro extends slide, it may find support around 1.60 against the kiwi, 1.40 against the loonie and 1.44 against the aussie.

The euro pared gains to 0.7025 against the pound and 1.0815 against the franc, from its prior highs of 0.7080 and 1.0847, respectively. The next likely support for the euro may be located around 0.68 against the pound and 1.06 against the franc.

Looking ahead, at 7:30 am ET, the U.K. Finance Minister George Osborne presents Autumn Statement and Spending Review, in London.

In the New York session, U.S. durable goods orders, personal income and spending data, new home sales data - all for October, U.S. FHFA house price index for September, U.S. weekly jobless claims for the week ended November 21, U.S. University of Michigan's final consumer sentiment index for November and U.S. crude oil inventories data are set to be published.

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