* Euro rises as global risk appetite grows
* ECB assurances on liquidity provisions help lift euro
* Solid Spanish bond demand also contribute to gains
* ECB keeps rates on hold; silent on bond purchase program
* Chinese export jump boosts confidence on global economy
(Adds comments, details; changes byline)
By Steven C. Johnson and Vivianne Rodrigues
NEW YORK, June 10 (Reuters) - The euro rose on Thursday for
a third straight day as strong demand for Spanish bonds eased
concern about the country's ability to finance its debt and a
spike in Chinese exports boosted confidence on global growth.
Investors also breathed a sigh of relief after European
Central Bank President Jean-Claude Trichet said three-month
emergency loans to banks would continue until September and
when Germany's high court rejected efforts to block German
guarantees for euro zone financial aid. For more, see
[] and []
Traders said that added to momentum that's been building
since the euro fell below $1.19 on Monday, its lowest level
since early 2006. It was last up 1 percent to $1.2084 <EUR=>,
headed for its best day against the dollar in two weeks.
Despite this week's gains, the euro has lost more than 15
percent against the dollar in 2010 and declines may resume.
"We tried to maintain a break below $1.20 and really
struggled. Then Trichet offered reassurance by extending
three-month funding, and now shorts are getting squeezed," said
Standard Chartered currency strategist Mike Moran.
"I don't think we've seen the bottom for the euro this
year, but this latest down leg is running out of steam," he
said.
The ECB left interest rates on hold as expected and raised
slightly its 2010 growth forecast, though Trichet said the pace
of growth would be uneven in coming quarters.
Technical analysts said the euro's downward trend would
come into question on a move above $1.2135, the 50 percent
retracement of the 2000-2008 euro rally.
But Brown Brothers Harriman strategist Marc Chandler said
it would probably take a move above $1.25 to signal a real
sentiment shift, and Moran said good selling interest was seen
around $1.2450.
Further technical support level for the single currency is
seen at $1.2705 while resistance will be found at $1.2854,
according to Reuters data.
GOOD NEWS FROM SPAIN, CHINA
The euro also rose 0.7 percent to 110.14 yen <EURJPY=>,
while the dollar fell 0.3 percent to 90.98 yen <JPY=>.
Sterling rose 0.8 percent to $1.4660 <GBP=D4>. Earlier, the
Bank of England left interest rates at a record low ahead of
the government's June 22 budget, which will detail the
belt-tightening the UK faces as it tries to cut its deficit.
Solid demand at a Spanish auction also eased concern and
cemented support for the euro. The amount of bonds sold came in
at the top of the expected range, even though they were sold at
a premium compared to a similar issue in April.
The auction "adds to the story that the euro may be due a
bit of a bounce as it has come a long way down in a relatively
short space of time," said Gavin Friend, currency strategist at
nabCapital.
Investors were also cheered when China confirmed that
exports jumped 48.5 percent in the 12 months to May. That eased
concern that Europe's debt woes would hurt the global economy.
[]
European and U.S. stocks rose and the growth-sensitive
Australian dollar <AUD=D4> soared 2.2 percent to $0.8462,
buoyed by strong Australian jobs data. An interest rate rise in
New Zealand lifted the kiwi dollar 2 percent to $0.6839
<NZD=D4>.
NO BOND BUYING DETAILS
Investors did not get new details from the European Central
Bank about its program to buy euro zone government bonds,
though Trichet said the purchases would not alter the bank's
monetary policy stance.
As of Friday, the ECB had bought 40.5 billion euros worth
of euro zone debt, a program it began last month as selling
pressure on Spanish, Greek and other sovereign debt increased.
The program is designed to lower countries' borrowing
costs.
(Additional reporting by Jessica Mortimer in London; Editing
by Diane Craft)
