FOREX-Euro rises broadly after ECB rate cut; Trichet eyed

                                
 * Euro gains broadly after ECB cuts rates by 25 bps to 1 pct
                                
 * Trichet presser awaited at 1230 GMT; Stg falls after BoE
                                
 * US bank stress test results in focus 
                                
 * Rising risk appetite hits yen, lifts Aussie to 7-mth highs
                                
 
                                
 (Updates prices, adds quotes, changes byline)
                                
 By Jessica Mortimer
                                
 LONDON, May 7 (Reuters) - The euro rose broadly on Thursday
after the European Central Bank cut interest rates by 25 basis
points as expected, with investors awaiting ECB President
Jean-Claude Trichet's press conference at 1230 GMT.     
                                
 Traders cited broad demand for the single currency from
speculators after it had come under selling pressure in the days
leading up to the meeting.
                                
 Euro zone interest rates now stand at a record low 1 percent
after the ECB's cut, which had been fully expected by markets.
The central bank also kept its overnight deposit rate at 0.25
percent [ID:nFAE003004].
                                
 Attention is now focused on the accompanying press
conference by ECB President Jean-Claude Trichet, where investors
will be looking to see whether it announces any additional
measures to stimulate the euro zone's slowing economy.
                                
 "The 25 basis point cut was fully factored. If Trichet is
fairly restricted on QE ... or if he signals that this is the
last one (rate cut) then that could give the euro a push
higher," said Neil Jones, head of FX hedge fund sales at Mizuho
in London.
                                
 Meanwhile, sterling turned lower after the Bank of England
unexpectedly extended its size of its quantitative easing
programme.
                                
 Elsewhere, ongoing investor optimism that the global economy
is over the worst of the recession encouraged investors to take
on more risk, bolstering equities and perceived higher risk
currencies at the expense of the yen. 
                                
 This helped propel the Australian dollar to a 7-month high
against both the yen and the U.S. dollar. 
                                
 At 1201 GMT the euro rose 0.4 percent against the dollar to
$1.3366 <EUR=>. However, it remained below a 1-month high of
$1.3439 hit on Tuesday on EBS and the 200-week moving average
technical resistance of $1.3414.
                                
 Against a broadly weak yen, the euro jumped 1.3 percent to a
session high of 132.73 <EURJPY=R>.
                                
 The dollar also rose 0.8 percent against the Japanese
currency to 99.24 <JPY=>.
                                
 The Australian dollar hit a 7-month high of 75.35 yen
<AUDJPY=> as risk appetite gained traction and following earlier
data showing Australian employment gained against all
expectations and threw doubt on the need for further rate cuts.
[ID:nSYD389866]
                                
 It also climbed 1.6 percent against the U.S. dollar to a
seven-month high of $0.7592 <AUD=D4>, breaking further above the
200-day moving average of $0.7144.
                                
 "Global financial markets are being force fed liquidity, and
that's spilling out. It's not that investors particularly want
to take risks but they're being forced to take risks," said
Robert Minikin, senior strategist at Standard Chartered.
                                
 "It's yield seeking in what is a very, very low yield
world," he said.
                                
 
                                
 BOE DENTS STERLING
                                
 Sterling turned lower against both the dollar and the euro
after the BoE said it would increase the size of its asset
purchase programme by 50 billion pounds to 125 billion pounds
and left interest rates at a record low 0.5 percent.
[ID:nL7190022]
                                
 Analysts said the move dented sterling because most
investors had expected the central bank to hold off on
announcing any increase in its quantitative easing programme
until June.
                                
 Sterling was down 0.2 percent against the dollar at $1.5089
<GBP=>, having earlier risen to a four-month high of $1.5198,
while the euro gained 0.6 percent to 88.58 pence <EURGBP=> after
earlier hitting its lowest level in two and a half months.
                                
 Beyond the ECB press conference, dealers are also awaiting
the official results of the 19 U.S. banks stress tests at 2100
GMT on Thursday.
                                
 U.S. Treasury Secretary Timothy Geithner said on Wednesday 
none of the 19 banks being examined are at risk of insolvency,
although reports suggest many need more capital. [ID:nN06300175]
[ID:nL6943131]
                                
 Regulators have told Bank of America <BAC.N> it needs $34
billion of capital, while Citigroup <C.N> needs $5 billion and
auto and mortgage lender GMAC LLC <GM.N>[CBS.UL] needs $11.5
billion, according to people familiar with the matter.
                                
 On Wednesday, figures showed the pace of private-sector U.S.
job losses slowed drastically in April in figures that precede
Friday's more comprehensive non-farm payrolls report by the
government. [ID:nN06133099].
 (Reporting by Jessica Mortimer and Jamie McGeever)