* Banks borrow 131.9 bln euros from ECB, less than expected
* Swiss franc falls as Hungary plans new IMF deal
* U.S. private sector adds fewer jobs than expected
(Adds quotes, updates prices, changes byline)
By Wanfeng Zhou
NEW YORK, June 30 (Reuters) - The euro rose across the
board on Wednesday after banks borrowed less money than
expected from the European Central Bank, soothing concerns over
European banks' funding issues.
The tender results were keenly awaited as a gauge of how
reliant European banks are on ECB emergency funding. Spanish,
Portuguese and Greek banks have been the biggest users of the
facilities.
Despite Wednesday's gains, the euro remains on track for a
loss of 9.3 percent this quarter, the third straight quarterly
decline. The single currency hit a four-year low around $1.1875
on June 7.
"The much less-than-expected requirement for ECB funding is
significant, as it suggests that difficulties throughout
euro-zone financial institutions were not as bad as originally
feared," said Jamie Heighway, a market analyst at Custom House,
a Western Union company, in Victoria, British Columbia.
"Cleary a relief for investors at least over the short
term," he added.
The ECB lent banks 131.9 billion euros ($161.4 billion) in
three-month funds, well below expectations of demand of 210
billion euros, according to a Reuters poll. Banks face the
repayment of close to half a trillion euros in 12-month funds
on Thursday. []
The euro hit a session high of $1.2304 <EUR=>, according to
Reuters data, rebounding from a two-week low hit on Tuesday. It
last traded at $1.2262, up 0.7 percent.
Option dealers are indicating expiries at 1.2300, 1.2320/25
and 1.2350 during the day.
The single European currency also rose 1.4 percent against
sterling <EURGBP=>.
Flows related to the end of the month, quarter and half
year affected price movements in thin trade, traders said.
Against the yen, the euro was up 0.8 percent at 108.65 yen
<EURJPY=>,after hitting an 8-1/2-year low on Tuesday.
However, for the year-to-date, the euro is still down 14.3
percent against the U.S. currency, down 18.3 percent against
the yen and down 10.9 percent versus the Swiss franc <EURCHF=>
"The euro has a long way to go in attempting to buck the
current downtrend," Heighway said. The euro needs to first test
trendline resistance around $1.2360 before any chance of taking
out the $1.24 figure and beyond, he added.
RISK STAYS HIGH
Against the yen, the dollar was little changed at 88.58
<JPY=>, after falling earlier on concerns about the outlook for
the U.S. economy following a report showed U.S. private
employers added a paltry 13,000 jobs in June. [].
The U.S. government's closely watched monthly nonfarm
payrolls data will be released on Friday.
"The downside surprise will be seen as taking away from any
upside nonfarm payroll surprise and is consistent with a labor
market that is lethargic at best, moribund at worst," said Alan
Ruskin, head of currency strategy, RBS Global Banking & Markets
in Stamford, Connecticut.
Market players were cautious ahead of more events that
could pose a risk for the single currency, including the German
presidential election on Wednesday. []
The German presidential vote will go to a third round after
Chancellor Angela Merkel's conservative candidate failed to win
an absolute majority in the first and second rounds.
[].
Antje Praefcke, currency strategist at Commerzbank in
Frankfurt, said the move raises questions about Merkel's
political support and could weigh on the euro.
The Swiss franc fell against the euro after Hungary said it
was eyeing a new standby loan agreement with the International
Monetary Fund for 2011. [] The move alleviated
some concerns about Hungary's large stock of franc-denominated
debt.
The euro was last up 0.2 percent at 1.3210 francs <EURCHF=>
after hitting a lifetime low of 1.3165 on electronic trading
platform EBS on Tuesday.
(Additional reporting by Nick Olivari; Editing by Leslie
Adler)
