* Spain budget aims to save 27 bln euros
* Euro rises, but remains vulnerable to sovereign debt
worries
* Euro has best quarter in a year vs dollar
NEW YORK, March 30 (Reuters) - The euro rallied against the
dollar and the yen on Friday after budget cuts in Spain boosted
hopes the country could stick to an austerity path, though mixed
U.S. data capped some gains.
Spain presented a budget that aims to save more than 27
billion euros in 2012 through spending cuts and revenue
increases. Also in Europe, euro zone finance ministers agreed to
strengthen their financial firewall to contain the region's debt
crisis.
Both moves had been largely expected by markets but the euro
still rallied.
U.S. data sent mixed signals and did little to push
currencies out of recent ranges. The pace of business activity
in the Midwest slowed while gains in consumer spending
outstripped an increase in income.
"We have a lot of conflicting data points, a lot of
conflicting news," said Camilla Sutton, chief currency
strategist at Scotia Capital. "There's no catalyst to break
things out of month-long ranges."
The euro rose 0.3 percent against the dollar to $1.3335
and gained 0.7 percent to 110.35 yen.
The greenback swung between gains and losses against the yen
but last traded up 0.4 percent at 82.73 yen with the peak
at 82.86 and the low at 81.82 yen.
The single currency was on track for its best quarter
against the dollar in a year, up 2.9 percent, benefiting after
the European Central Bank's second injection of cheap long-term
funds helped ease euro zone debt worries.
Both the euro and the dollar were set for strong
performances against the yen in the first quarter. The yen has
struggled since the Bank of Japan boosted its asset-buying
program in February. That move, as well as the threat of more
easing, has kept the yen on weaker ground.
The dollar was on track to advance 7.6 percent against the
yen this quarter, its first quarterly gain since the first
quarter of 2011 and its biggest quarterly gain since the first
quarter of 2009.
The euro's performance against the yen was even stronger - a
climb of around 10.9 percent, its best quarterly performance
since the fourth quarter of 2000.EURO STILL VULNERABLE
Analysts cautioned that risk remains as markets head into
the second quarter.
The euro on Friday hit its lowest against the Swiss franc
since mid-September, according to Reuters data, as investors
tested the resolve of the Swiss National Bank to hold the euro
floor at 1.2000 francs.
The single currency fell to as low as 1.2026 francs
, its lowest since September 14, using Reuters data. It
was last at 1.2035 francs, down 0.2 percent.
In the euro zone, many of the underlying causes of the
sovereign debt crisis, such as growth differentials among the
region's economies, remain in place, said Omer Esiner, chief
market analyst with Commonwealth Foreign Exchange in Washington,
D.C.
"It's just hard to get really bullish on the euro, even when
you see relatively good news," he added.
Many analysts expect the euro could resume its decline in
the coming quarter on concerns about indebted peripheral
countries and the prospect a large economy such as Spain or
Italy may need help.
"The key question is whether it is possible for those
countries to compete on the global market," said Anders
Soderberg, currency strategist at SEB in Stockholm. "For each
set of austerity measures they announce, the economy takes a
step lower."
U.S. data will also be key in the second quarter, including
non-farms payrolls next Friday.
A recent run of optimism over the world's largest economy
could be setting markets up for disappointment in coming weeks,
said Stewart Hall, a senior currency strategist with RBC Capital
Markets in Toronto.
"We don't even need to see the U.S. data tail off, just a
lack of progression," he said.
* Euro rises, but remains vulnerable to sovereign debt
worries
* Euro has best quarter in a year vs dollar
NEW YORK, March 30 (Reuters) - The euro rallied against the
dollar and the yen on Friday after budget cuts in Spain boosted
hopes the country could stick to an austerity path, though mixed
U.S. data capped some gains.
Spain presented a budget that aims to save more than 27
billion euros in 2012 through spending cuts and revenue
increases. Also in Europe, euro zone finance ministers agreed to
strengthen their financial firewall to contain the region's debt
crisis.
Both moves had been largely expected by markets but the euro
still rallied.
U.S. data sent mixed signals and did little to push
currencies out of recent ranges. The pace of business activity
in the Midwest slowed while gains in consumer spending
outstripped an increase in income.
"We have a lot of conflicting data points, a lot of
conflicting news," said Camilla Sutton, chief currency
strategist at Scotia Capital. "There's no catalyst to break
things out of month-long ranges."
The euro rose 0.3 percent against the dollar to $1.3335
and gained 0.7 percent to 110.35 yen.
The greenback swung between gains and losses against the yen
but last traded up 0.4 percent at 82.73 yen with the peak
at 82.86 and the low at 81.82 yen.
The single currency was on track for its best quarter
against the dollar in a year, up 2.9 percent, benefiting after
the European Central Bank's second injection of cheap long-term
funds helped ease euro zone debt worries.
Both the euro and the dollar were set for strong
performances against the yen in the first quarter. The yen has
struggled since the Bank of Japan boosted its asset-buying
program in February. That move, as well as the threat of more
easing, has kept the yen on weaker ground.
The dollar was on track to advance 7.6 percent against the
yen this quarter, its first quarterly gain since the first
quarter of 2011 and its biggest quarterly gain since the first
quarter of 2009.
The euro's performance against the yen was even stronger - a
climb of around 10.9 percent, its best quarterly performance
since the fourth quarter of 2000.EURO STILL VULNERABLE
Analysts cautioned that risk remains as markets head into
the second quarter.
The euro on Friday hit its lowest against the Swiss franc
since mid-September, according to Reuters data, as investors
tested the resolve of the Swiss National Bank to hold the euro
floor at 1.2000 francs.
The single currency fell to as low as 1.2026 francs
, its lowest since September 14, using Reuters data. It
was last at 1.2035 francs, down 0.2 percent.
In the euro zone, many of the underlying causes of the
sovereign debt crisis, such as growth differentials among the
region's economies, remain in place, said Omer Esiner, chief
market analyst with Commonwealth Foreign Exchange in Washington,
D.C.
"It's just hard to get really bullish on the euro, even when
you see relatively good news," he added.
Many analysts expect the euro could resume its decline in
the coming quarter on concerns about indebted peripheral
countries and the prospect a large economy such as Spain or
Italy may need help.
"The key question is whether it is possible for those
countries to compete on the global market," said Anders
Soderberg, currency strategist at SEB in Stockholm. "For each
set of austerity measures they announce, the economy takes a
step lower."
U.S. data will also be key in the second quarter, including
non-farms payrolls next Friday.
A recent run of optimism over the world's largest economy
could be setting markets up for disappointment in coming weeks,
said Stewart Hall, a senior currency strategist with RBC Capital
Markets in Toronto.
"We don't even need to see the U.S. data tail off, just a
lack of progression," he said.
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