* Euro recovers, supported by optimism on Greek rescue
* Solid euro zone data helps; Greek bond spreads narrow
* U.S. weekly jobless claims fall in latest week
(Recasts, updates prices)
NEW YORK, April 29 (Reuters) - The euro rose for a second straight day on Thursday, rebounding from a one-year low in the prior session, on hopes a bailout for Greece will be larger than expected and allow it to avoid a debt default.
European Union Economic and Monetary Affairs Commissioner Olli Rehn said the EU should complete talks "within days." But Rehn said he still could not provide details of the deal, which he said were conditional upon fiscal consolidation.
Investors were comforted by signs the aid package for Greece could be worth as much as 100 billion to 120 billion euros ($133 billion-$158.5 billion) over three years -- much more than an earlier reported 45 billion euros. [ID:nBAT005353]
"The market sees a bigger package for Greece, covering three years, as a bigger backstop," said Kenneth Broux, market economist at Lloyds Banking Group in London. "This is helping to address some investor fears and giving some support for the euro."
Gains were limited by a lack of details on the Greece package, leaving uncertainties about the timing and implementation of any deal. Investors are also worried the crisis may spread to other members of the euro zone. For details, see [ID:nLDE63S0BL]
The single currency is down about 7.5 percent against the dollar so far this year.
The euro touched a one-year low around $1.3112 on Wednesday after Standard & Poor's cut Spain's credit rating following downgrades to Greece and Portugal, according to Reuters data. On electronic trading platform EBS <EUR=EBS>, the euro/dollar low was $1.3114.
In late afternoon New York trading, the euro was 0.3 percent higher at $1.3244 <EUR=>. It earlier rose as high as $1.3280 according to Reuters data.
The yen edged lower against the dollar <JPY=> at 94.07 yen, while euro/yen <EURJPY=> rose 0.2 percent to 124.56 yen. Sterling gained 0.8 percent against the dollar to $1.5320 <GBP=>, tracking gains in the euro.
"People tend to forget that just a couple of months ago the euro was trading at $1.50," said Matthew Strauss, a senior currency strategist at RBC Capital Markets in Toronto. "For some type of investors, buying some euros back at $1.32 is more than justified."
The European Commission's measure of euro zone sentiment also jumped much more than expected in April, pointing to strengthening economic activity. [ID:nLDE63S0O1]
FOMC, JOBLESS CLAIMS
In the United States, a statement from the Federal Reserve on Wednesday offered a more upbeat view of the U.S. economy, helping boost risk sentiment and weighing on the safe-haven dollar and low-yielding yen.
At the conclusion of its two-day rate setting committee meeting on Wednesday, the Fed maintained its pledge to keep interest rates low for an "extended period," and slightly upgraded some of its economic forecasts. [ID:nN27125552]
"Last night's FOMC statement showed that the Fed is not willing to ruffle feathers at this stage, but acknowledges recent improvements in the labor market and in consumption," Geoffrey Yu, an analyst at UBS said in a note.
A government report, however, showed the number of U.S. workers filing new applications for unemployment insurance fell slightly less than expected. [ID:nN28206933]
"Claims have still not taken out their late March low, and the improvement in the labor market remains slow," Alan Ruskin, head of currency strategy at RBS Global Banking & Markets, said in a note.
Ruskin said the claims data would have little bearing on a market "where all the focus is still on the euro periphery." (Additional reporting by Jessica Mortimer in London; (Reporting by Nick Olivari and Vivianne Rodrigues; Editing by Andrew Hay)