(Reuters) - The euro hovered near one-week highs on Thursday and growth-linked currencies were supported by expectations that global policymakers will act soon to support a flagging economic recovery. That drove investors to unwind bets on safe-haven currencies like the dollar and the Japanese yen. Both may stay under pressure ahead of Federal Reserve chairman Ben Bernanke's testimony later in the day, traders said. Hopes for more stimulus from the Fed received a boost after Janet Yellen, the Fed's vice chair, laid out the case for more easing to bolster a fragile economy as financial turmoil in Europe mounts. The global economy has floundered in recent weeks and risks to growth have risen given chances of a Greece exit from the euro zone and expectations that Spain will have to seek an international bailout to help its banking sector. This has put pressure on euro zone politicians and global central banks to come up with a credible policy response to support growth. Also boosting risk sentiment in general, data showed Australian employment surged in May despite forecast of a fall, pushing the Aussie dollar to its highest in three weeks. The single currency last stood at $1.2565, having briefly risen to $1.25859, its highest level since late May and about 2.3 percent above a two-year low of $1.2288 hit last week. Traders cited resistance at around $1.2625, the January low which was also last week's high. "The euro can bounce up to $1.2630 but then it will be a sell on rallies as Europe's problems are ...considerable," said Stuart Frost, head of Absolute Returns and Currency at fund manager RWC Partners. "There is also profit taking in long dollar positions. We expect Bernanke to strike a dovish tone and that will keep alive expectations of more quantitative easing." More easing by the Fed would likely weigh on the dollar while giving a fillip to growth-linked currencies like the Australian and New Zealand dollars and to some extent the euro and the pound. The dollar index .DXY was down 0.1 percent at 82.253. While Yellen is known to be a dove and her comments late on Wednesday did not surprise markets, other officials, such as Atlanta Fed President Dennis Lockhart, also talked about possible need for action, saying his level of concern had risen since the Fed's April meeting. "Since (last week's) weak U.S. job data, there's been rising speculation of more stimulus from the Fed. That is making dollar long positions uncomfortable," said Katsunori Kitakura, associate general manager of market-making unit at Sumitomo Mitsui Trust Bank. SPANISH AUCTION In Europe, traders said further gains in the euro will depend on the market's response to a Spanish bond auction. The sale of up to 2 billion euros of bonds is seen as a crucial test of Madrid's ability to continue to refinance its debt. Spanish and Italian government bond yields slipped ahead of the sale. Spain has been on investors' radar in the past two weeks, relegating worries about a Greek euro exit. While there has been no concrete progress on steps to support Spain, European sources said Germany and European Union officials are urgently exploring ways to support Spain's stricken banks. Spain has not yet requested outside assistance and is resisting being placed under international supervision, but signs of sense of crisis hounding policymakers - such as a Group of Seven conference call on Tuesday - were making traders uneasy about holding large bearish positions against the euro. The Australian dollar rose to three-week high of $0.9969 on upbeat jobs data, which came a day after strong growth numbers. It last stood at $0.9955, up 0.4 percent on the day. The U.S. dollar managed to outperform the yen, which was hit broadly as risk appetite improved. The yen was also dampened by recent threats from Japanese authorities to curb its strength. The dollar was 0.1 percent higher at 79.30 yen, off a 3-1/2 month trough around 77.65 set on June 1.

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