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FOREX-Euro rises for third day but gains could fade – Reuters news and update details. I hope you will find useful information for making trading decision today.
* Spanish borrowing costs rise above 7 percent * Italy sells 3-year debt at 6-month high * U.S. jobless claims rise in latest week * Investors wary ahead of Greek election on Sunday By Julie Haviv NEW YORK, June 14 (Reuters) - The euro edged up against the dollar for a third straight session on Thursday as investors continued to pare back large bearish positions ahead of Sunday's elections in Greece, but worries about Spain and Italy's borrowing costs could cap gains. The yield on Spain's benchmark 10-year notes hit a euro-era high above 7 percent, a level seen as unsustainable. It was also at this level when Greece and Ireland were forced to seek international bailouts. "A lot of the shorts on the euro are still being covered, but no one is making fresh euro longs ahead of Sunday," said Brian Kim, currency strategist at RBS Securities in Stamford, Connecticut. "No one wants to take that risk." Speculators' net short positioning in the euro hit a record high last week, leaving scope to the euro for further gains if the New Democracy party, which supports austerity and reforms, wins on Sunday. In early afternoon trading, the euro rose 0.3 percent to $ 1.2593. Against the yen, the euro was up rose 0.2 percent at 99.93 yen. Traders at ActionForex.com said offers remain at the $ 1.2590-$ 1.2600 area, with stops building above $ 1.2610-$ 1.2615. But fresh selling interest could emerge around $ 1.2650-$ 1.2660 with more stops placed above $ 1.2675-$ 1.2680 and $ 1.2700. On the downside, bids from Asian and Middle East names are tipped at $ 1.2540-$ 1.2550 and also at $ 1.2520-$ 1.2525 with stops building below $ 1.2500, ActionForex said. Decent bids, however, remain at $ 1.2440-$ 1.2450, followed by sizable stops below $ 1.2430 and $ 1.2400. The Group of 20 leaders' summit takes place in Mexico on Monday and Tuesday, and the U.S. Federal Reserve will hold its policy meeting on Tuesday and Wednesday. There have been persistent fears that if Greece's leftist Syriza party, which is opposed to anti-austerity measures, wins the elections on Sunday it will put Greece on course to exit the euro. But euro zone officials on Thursday said the 17-nation bloc will not tear up the main targets of Greece's bailout no matter who wins the elections. The euro zone, however, might consider giving a new government in Athens some leeway on how it reaches them, the officials told Reuters. The election remains too close to call and a victory for Syriza would intensify fears of a potential euro zone break-up, and likely push the currency toward recent two-year lows around $ 1.2280. Meanwhile, the aid deal put together for Spanish banks last weekend has failed to calm the markets. Italian three-year borrowing costs spiked to 5.30 percent at an auction on Thursday. Spain and Italy promised new measures to repair their public finances. But German Chancellor Angela Merkel rebuffed pressure from EU partners and the United States for Europe's most powerful economy to underwrite debt or guarantee bank deposits in the single currency area. "Spanish yields are creeping up, which clearly indicates that the bank bailout deal will not change anything and they are dragging Italian yields higher," said Stuart Frost, head of absolute returns and currency at fund manager RWC Partners. "For the euro/dollar, all this means it is on a slippery slope down." The dollar slipped against the yen and euro after U.S. data showed the number of Americans filing new claims for unemployment benefits unexpectedly rose last week. Separate data showed U.S. consumer prices fell in May by the most in over three years. The dollar last traded at 79.34 yen, down 0.1 percent on the day.