LONDON — The euro rose on Tuesday on news of successful bond auctions in Ireland, Greece and Spain, ahead of an eagerly-awaited interest rate decision from the US Federal Reserve. In morning trading in London, the euro rose to 1.3144 dollars from 1.3060 dollars late on Monday in New York. Against the Japanese currency, the dollar dipped to 85.62 yen from 85.71 yen on Monday. Ireland said on Tuesday that it had raised 1.5 billion euros (1.96 billion dollars) as planned, in an oversubscribed bond auction seen as a crucial test of investor confidence in the deeply strained Irish economy. At the same time, Greece revealed that it raised 390 million euros, with demand six times greater than the amount on offer. And Spain added that it has also raised 7.04 billion euros in a successful auction. "The euro is responding well to the auction results with euro/dollar making headway in an environment also characteristed by dollar weakness," said Rabobank currency analyst Jane Foley. Investors are uneasy over the eurozone debt and deficit crisis, which is centred on the poor state of public finances in Portugal, Ireland, Italy, Greece and Spain -- known as the PIIGS countries. Ireland's sale comes as it fights speculation that it may have to seek assistance from the International Monetary Fund or European Union owing to the strains on its public finances. However, the latest round of bond auctions appears to have doused market concerns over a new chapter in the eurozone debt drama. Lloyds Banking Group economist Kenneth Broux said that the bond auction results are "definitely positive for the euro". He added: "If EU countries manage to sell their paper it means smaller perceived risk of refunding crisis/EU assistance -- so it helps to shore up investor confidence in the single currency." All eyes were also on the US economy as the Federal Reserve prepares to hold its latest monetary policy meeting on Tuesday. The crisis-struck US economy has regained some momentum since the Fed last met in late June, but the recovery remains fragile and joblessness high heading into elections for Congress in November. Many traders were betting that the Fed would need to see another round of negative US data before it might ease monetary policy further, a scenario that would pressure the dollar. The British pound meanwhile held steady at about 1.55 dollars as investors digested official data which showed that government borrowing widened unexpectedly in August to hit a record high for the month. The public sector net borrowing requirement jumped to 15.3 billion pounds (18.1 billion euros, 23.8 billion dollars) compared with 13.5 billion pounds in August 2009. In London on Tuesday, the euro changed hands at 1.3144 dollars against 1.3060 dollars late in New York on Monday, at 112.55 yen (111.96), 0.8463 pounds (0.8401) and 1.3193 Swiss francs (1.3121). The dollar stood at 85.62 yen (85.71) and 1.0039 Swiss francs (1.0046). The pound was at 1.5532 dollars (1.5547). On the London Bullion Market, the price of gold fell to 1,279.05 dollars an ounce from 1,279.25 dollars an ounce late on Monday, when it had struck a record high at 1,283.80.

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