FX: Euro slips vs dollar on persistent Greek aid uncertainty
* Euro falls for 7th straight session vs dollar
* Greece asks to activate EU/IMF aid mechanism
* U.S. durables data boosts dollar (Adds quote, updates prices, changes byline, dateline; previous LONDON)
By Gertrude Chavez-Dreyfuss
NEW YORK, April 23 (Reuters) - The euro fell against the U.S. dollar for a seventh straight session on Friday, as questions persisted about how a financial aid package for debt-stricken Greece would be implemented.
Earlier on Friday, Greece sought to trigger a package of emergency financial aid from the European Union and International Monetary Fund, which initially lifted the euro as the move eased concerns about the country's about its short-term funding needs. [ID:nLDE63M0XZ]
But the euro's rebound lost steam as analysts said tapping the aid mechanism worth 45 billion euros was not likely to solve Greece's longer-term problems in tackling its budget deficit. Investors also sought clarity and details on how the loan would be disbursed to Greece.
"The euro bounced initially because the markets were relieved that Greece activated the loan and that's out of the way and lot of people have been waiting or this to happen," said Amelia Bourdeau, senior currency strategist, at UBS in Stamford, Connecticut.
"But the euro bounce is very limited because the activation itself lacked details. We don't know how long it's going to take for parliaments in Europe to ratify the process of giving Greece the money."
In early New York trading, the euro was down 0.1 percent against the dollar at $1.3274 , after hitting a session high of $1.3346 as talk Greece would ask to tap the mechanism triggered stop-losses through $1.3330-40, traders said.
Earlier, the euro sank to a one-year low against the dollar of $1.3202, according to Reuters data, and still on track for a fall of more than 1 percent against the dollar this week.
The premium investors demand to buy Greek government bonds rather than euro zone benchmark Bunds, a gauge of perceived sovereign risk, climbed from session lows on Friday. The Greek/German 10-year bond yield spread climbed to 580 basis points, well off the session low of 525 bps, but still tighter on the day.
The spread had narrowed by as much as 84 basis points on the day on the news that Greece would activate an EU/IMF aid package. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic of Greek bond yields and the euro, click
Euro zone finance ministers will decide on the release of emergency loans after the European Commission and the European Central Bank ruled the Greek aid request was valid. The European Commission said there were no deadlines. [ID:nBFA001150]
Greece, however, expects to receive the first tranche of funds under a 45 billion euro ($60.49 billion) EU/IMF aid package before May 19, Finance Minister George Papaconstantinou said on Friday. [ID:nATH005402]
Worries about Greece have stung demand for risky assets and boosted the dollar, considered a safe bet in uncertain times. Against a currency basket <.DXY>, the greenback hit a one-month high of 82.074 before pulling back to 81.631. It was last at 81.835, up 0.3 percent on the day.
The dollar was further boosted by U.S. data showing new orders for long-lasting manufactured goods excluding transportation posted their largest gain in more than two years. [ID:nN23141873].
"These are some large numbers. We're looking for something between 3.5 percent and 4 percent on first-quarter GDP due out next week," said Michael Woolfolk, senior currency strategist at BNY Mellon in New York.
"I think the market can go into the weekend comfortable that the U.S. recovery is still going full swing."
The dollar rose 0.7 percent against the yen to 94.06 , after earlier hitting a high at 94.22, a two-week peak.
(Additional reporting by Steven C. Johnson in New York, Tamawa Desai in London; Graphic by Scott Barber in London; Editing by Chizu Nomiyama)
