LONDON — The European single currency held above $1.31 on Thursday as the foreign exchange market digested successful bond auctions in Italy and Spain, ahead of an interest rate call from the European Central Bank. In late morning deals, the euro rose to $1.3137 from $1.3128 in New York late on Wednesday. Spain passed a major test on Thursday in its first bond auction of 2011, bolstering its case that it has no need for an emergency bailout which would take the eurozone into a new chapter of crisis. Spain sold its maximum target of 3.0 billion euros ($3.9 billion) in five-year bonds with demand oustripping supply by two-to-one. Shortly afterwards, Italy raised 6.0 billion euros in bonds on Thursday at unexpectedly high rates, also easing concerns of a new phase in the eurozone debt crisis. The sales reflected the new confidence of investors who were also reassured by Portugal's successful bond auction on Wednesday. "Both the Spanish and Italian auctions attracted decent demand this morning," said Rabobank analyst Jane Foley. "That does not mean to say that the market won't be worried about the next round of supply from the periphery. Portugal has huge redemptions in April, meaning that a bailout could well come ahead of them." Spain's Treasury had to fork out an average interest rate of 4.542 percent to lure investors, which was sharply up from the 3.576 percent paid at the last year five-year bond auction in November. Italy meanwhile issued 3.0 billion euros in five-year bonds and 3.0 billion euros in 15-year bonds, the Bank of Italy said in a statement. The yield was 3.67 percent for five-year bonds compared to 3.24 at the last sale, and 5.06 percent for the 15-year bonds compared to 4.81 percent. Foley added: "The clouds over the eurozone appear to be lifting, at least for the time being." The foreign exchange market's focus now switches to interest rate decisions in London and Frankfurt later on Thursday. The Bank of England is widely expected to keep British interest rates at a record low 0.50 percent, while the European Central Bank is forecast to leave eurozone borrowing costs at 1.0 percent. In London on Thursday, the euro changed hands at $1.3137 against 1.3128 late in New York on Wednesday, at 109.18 yen (108.95), £0.8346 (0.8329) and 1.2789 Swiss francs (1.2690). The dollar stood at 83.01 yen (82.98) and 0.9722 Swiss francs (0.9663). The pound was at $1.5763 (1.5760). On the London Bullion Market, the price of gold rose to $1,382.20 an ounce from 1,378.75 late on Wednesday.

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