* Euro recovers, supported by optimism on Greek aid package
* Solid euro zone data helps; Greek bond spreads narrow
* U.S. weekly jobless claims fall in latest week
(Adds comments, details. Changes byline and dateline,
previous LONDON)
By Vivianne Rodrigues
NEW YORK, April 29 (Reuters) - The euro rose on Thursday,
rebounding from a one-year low the previous day, on hopes a
bailout plan for Greece was imminent and would help it avoid a
debt restructuring.
Gains were limited, however, as details of the Greece
package were thin, leaving uncertainties about the timing and
implementation of any deal.
Germany's largest opposition party said it would move
quickly to approve German participation, while European Union
Economic and Monetary Affairs Commissioner Olli Rehn said the
EU should complete talks "within days." []
[]
Rehn said, however, he still could not provide details of
the deal, which he said were "conditional on fiscal
consolidation."
"The market seems slightly more comfortable today, with the
expectations of an imminent aid package, to go euro-bargain
hunting at these levels," said Matthew Strauss, a senior
currency strategist at RBC Capital Markets in Toronto.
In morning trading in New York, the euro <EUR=> rose 0.3
percent against the dollar to $1.3258. Earlier it rose to as
high as $1.3280.
"People tend to forget that just a couple of months ago the
euro was trading at $1.50. For some type of investors, buying
some euros back at $1.32 is more than justified," Strauss said.
The single currency rebounded from a one-year low around
$1.3112 hit on Wednesday after Standard & Poor's cut Spain's
credit rating by one notch, a day after downgrades to Greece
and Portugal.
But the low was hit only briefly, with investors focusing
on comments from a German parliamentarian that the aid package
for Greece would be worth 100 billion to 120 billion euros
($133 milllion to $158.5 billion) over three years.
[]
"The market sees a bigger package for Greece, covering
three years, as a bigger backstop. This is helping to address
some investor fears and giving some support for the euro," said
Kenneth Broux, market economist at Lloyds Banking Group in
London.
The euro was also supported by euro zone economic sentiment
jumping much more than expected in April, pointing to
strengthening economic activity. []
Spreads between Greek and German bond yields also narrowed
on optimism over prospects for a bailout, while an Italian bond
auction passed relatively smoothly. [] [].
FOMC, JOBLESS CLAIMS
In the United States, a statement from the Federal Reserve
on Wednesday offered a more upbeat view of the U.S. economy,
helping boost risk sentiment and weighing on the safe-haven
U.S. dollar and low-yielding yen.
At the conclusion of its two-day rate setting committee
meeting on Wednesday, the Fed maintained its pledge to keep
interest rates low for an "extended period" and slightly
upgraded some of its economic forecasts. []
But Thursday, a government report showed the number of U.S.
workers filing new applications for unemployment insurance fell
slightly less than expected last week. []
"Claims have still not taken out their late March low, and
the improvement in the labor market remains slow," Alan Ruskin,
head of currency strategy at RBS Global Banking & Markets, said
in a note.
But Ruskin added that claims data will have little bearing
on a market "where all the focus is still on the euro
periphery."
The dollar index <.DXY> traded down 0.3 percent at 82.116
after a rally to a near one-year high of 82.714 on Wednesday.
The yen was flat versus the dollar <JPY=> at 94.03 yen,
while euro/yen <EURJPY=R> rose 0.4 percent to 124.70 yen.
(Additional reporting by Jessica Mortimer in London; Editing
by Padraic Cassidy)
