* Euro hits 3-week high $1.4522, extends post-Greek vote gains
* Investors relieved EZ debt problems under control for now
* 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 a wave of stop-loss buying and extending a rally after Greece moved a step closer to securing international aid.
Comments by European Central Bank President Jean-Claude Trichet, saying the bank was maintaining "strong vigilance" on inflation reinforced the euro's gains as the phrase is viewed as a signal the ECB, which meets next week, is poised to raise interest rates again.
Demand from a semi-official name, along with model funds, added to a flurry of short covering, which lifted the single currency after an option barrier was taken out at $1.45, paving the way for more gains in the near term.
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 Frankfurt.
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 rise more."
Given this, Park said she saw the possibility of the single currency testing the $1.50 level in the near term.
Broad speculation that euro zone interest rates will rise next week and perhaps again later in the year would also add to the single currency's upside, she said.
In early European trade, the euro rose as high as $1.4522, according to electronic trading platform EBS.
Its immediate upside was limited by offers cited around $1.4520, with larger sell orders seen from $1.4540. Some in the market cited protection of an options barrier around $1.4550, which may provide a ceiling for the euro for now.
On the downside, bids were seen in the mid $1.44 region, keeping the single currency well supported.
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 half a percent lower versus a currency basket.
The dollar index slipped as low as 74.255, its weakest since mid-June.
Against the yen, the dollar slipped roughly half a percent on the day to 80.35 yen.
ECB RATE OUTLOOK
Also boosting the euro is wide speculation 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.
While investors are content to focus on euro-positive factors, they have been raising concerns about the U.S. debt situation 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.
Analysts at JPMorgan said the dollar was vulnerable to more selling due to such concerns, pointing out that weak U.S. Treasury auctions and a rise in the benchmark 10-year bond yield to around 3.13 percent this week suggested sluggish demand for U.S. debt.
"The weak seven-year auction overnight and the weak demand for Treasuries in this past week's auctions highlight the market's growing concern with the US fiscal outlook and the risks to the dollar."
