(Adds comment, updates throughout)
* Euro rallies vs dollar, sterling
* Investors relieved Greek debt problems under control for
* More euro gains expected on ECB rate rise speculation
By Naomi Tajitsu
LONDON, June 30 - The euro rallied to a three-week high
against the dollar on Thursday, swept higher by demand from a
semi-official European name and a wave of stop-loss buying and
extending a rally after Greece moved a step closer to securing
The single currency jumped to a 15-month high versus
sterling, also boosted after comments from European Central Bank
President Jean-Claude Trichet reinforced speculation that the
ECB will raise interest rates next week.
The euro cheered the Greek parliament's passage of tough
austerity measures on Wednesday, enabling the debt-stricken
country to secure more emergency funding from the EU and the
International Monetary Fund and staving off the threat of a debt
default for now.
Athens on Thursday is expected to pass another vote on how
to implement the plan, clearing the last obstacle to the release
of 12 billion euros ($17.3 billion) of funding, which is
essential to meet debt payments by mid-July.
With talks progressing on a second aid package, analysts
believe the view that the euro zone debt crisis is under control
for the time being and that will propel the euro higher.
"In the short term, at least, a Greece default is unlikely,
and this is positive for the euro and also other risky assets,"
said You-Na Park, currency strategist at Commerzbank in
She added: "In the course of the next week or so, a second
aid package should be decided, so there is room for the euro to
In addition, broad speculation that euro zone interest rates
will rise next week and perhaps again later in the year would
support the euro, and Park said a test of $1.50 in the near term
The euro rose as high as $1.4522, according to
electronic trading platform EBS, before trimming gains to trade
at $1.4480 by 0938 GMT up 0.2 percent on the day.
Traders said sovereign selling in the single currency had
capped the euro's rise, while bids in the mid-$1.44 region were
seen as acting as a support.
The single currency is poised to gain nearly 1 percent
versus the dollar in June, having been volatile all month as
investors became jittery about whether the euro's relative
strength was warranted given Greece's debt problems.
Gains in the euro and other currencies considered higher
risk, including the Australian and New Zealand dollars -- the
latter of which hit a post-float high in earlier trade --
knocked the dollar lower versus a currency basket.
The dollar index traded 0.3 percent lower as 74.498,
having hit 74.255, its weakest since mid-June. It slipped
roughly half a percent on the day to 80.40 yen .
ECB RATE OUTLOOK
Bolstering the euro was the view that the European Central
Bank will raise interest rates by 25 basis points to 1.5 percent
next week, which would increase the single currency's rate
advantage over the dollar.
Some analysts said more encouraging data in the U.S.,
including recent housing figures, and signs the Japanese economy
may be recovering more quickly from its earthquake than
expected, were helping to improve the broad outlook for the
global economy through the second half of 2011.
Deutsche currency strategist Henrik Gullberg said this view
would further stock risk appetite, prompting investors to take
on more long euro positions -- or bets to buy the currency --
after cutting back on those positions recently.
"Uncertainty about the global outlook, as well as Greece,
has meant that a lot of long positions in risky currencies have
been scaled back," he said.
"Positioning is very light now, and there's a lot of room to
go back into these trades, which to some extent is what we're
At the same time, increasing concerns about the U.S. debt
situation may sour sentiment for the dollar as Washington
struggles to raise its budget limit.
Failure to increase the debt ceiling, which caps how much
the United States can borrow, would likely trigger a default
that could plunge the world's biggest economy into a new
recession and roil global financial markets.
(Reporting by Naomi Tajitsu; Editing by Toby Chopra)