The euro rose on Thursday for a third straight day as strong demand for Spanish bonds eased concern about the country's ability to finance its debt and a spike in Chinese exports boosted confidence on global growth. Investors also breathed a sigh of relief after European Central Bank President Jean-Claude Trichet said three-month emergency loans to banks would continue until September and also when Germany's high court rejected efforts to block German guarantees for euro zone financial aid. Traders said that added to momentum that's been building since the euro fell below $1.19 on Monday, its lowest level since early 2006. It was last up 1.2 percent to $1.2130 EUR=, headed for its best day against the dollar in two weeks. Despite this week's gains, the euro has lost more than 15 percent against the dollar in 2010 and declines may resume. "We tried to maintain a break below $1.20 and really struggled. Then Trichet offered reassurance by extending three-month funding, and now shorts are getting squeezed," said Standard Chartered currency strategist Mike Moran. "I don't think we've seen the bottom for the euro this year but this latest down leg is running out of steam," he said. The ECB left interest rates on hold as expected and raised slightly its 2010 growth forecast, though Trichet said the pace of growth would be uneven in coming quarters. Technical analysts said the euro's downward trend would come into question on a move above $1.2135, the 50 percent retracement of the 2000-2008 euro rally. But Brown Brothers Harriman strategist Marc Chandler said it would probably take a move above $1.25 to signal a real sentiment shift, and Moran said good selling interest was seen around $1.2450. Further technical support level for the single currency is seen at $1.2705 while resistance will be found at $1.2854, according to Reuters data. GOOD NEWS FROM SPAIN, CHINA The euro also rose 1.2 percent to 110.73 yen EURJPY=, while the dollar was flat at 91.27 yen JPY=. Sterling rose 1.2 percent to $1.4707 GBP=D4. Earlier, the Bank of England left interest rates at a record low ahead of the government's June 22 budget, which will detail the belt-tightening the UK faces as it tries to cut its deficit. Solid demand at a Spanish auction also eased concern and cemented support for the euro. The amount of bonds sold came in at the top of the expected range, even though they were sold at a premium compared to a similar issue in April. The auction "adds to the story that the euro may be due a bit of a bounce," said Gavin Friend, currency strategist at nabCapital. Investors were also cheered when China confirmed that exports jumped 48.5 percent in the 12 months to May. That eased concern that Europe's debt woes would hurt the global economy. European and U.S. stocks rose and the growth-sensitive Australian dollar AUD=D4 soared 2.6 percent to $0.8495 buoyed by strong Australian jobs data. An interest rate rise in New Zealand lifted the kiwi 2.4 percent to $0.6866 NZD=D4. The U.S. dollar eased against the yuan in the three-month non-deliverable forward market CNY3MNDFOR= in the aftermath of tough remarks by U.S. Treasury Secretary Timothy Geithner on the Chinese currency, slipping to around 6.8080 from 6.8235 previously. That implies a slight yuan strength of around 0.3 percent against the greenback over the next three months, as measured from the Chinese central bank's spot yuan midpoint. NO BOND BUYING DETAILS Investors did not get new details from the ECB about its program to buy euro zone government bonds, though Trichet said the purchases would not alter the bank's monetary policy stance. As of Friday, the ECB had bought 40.5 billion euros' worth of euro zone debt, a program it began last month as selling pressure on Spanish, Greek and other sovereign debt increased. The program is designed to lower countries' borrowing costs.

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