* Euro rises vs dollar, yen; markets await Greek aid
* Euro to remain vulnerable, contagion risks in focus
* U.S. 1st quarter GDP grows at slower-than-expected pace (Recasts, updates prices)
By Nick Olivari
NEW YORK, April 30 (Reuters) - The euro rallied against the U.S. dollar on Friday for a third straight day as expectations that Greece will soon receive emergency aid helped calm investors concerned how Athens will pay its huge debts.
Investors were heartened that a multibillion-euro package aimed at averting a default could be announced in coming days. This helped shrink the premium investors demand to hold Greek government bonds over benchmark German paper, supporting the euro.
"There have been some encouraging signs in terms of size and speed of the aid package to Greece, which for now are enough to support the euro a bit and encourage profit takers to sell some dollars," said Vassili Serebriakov, a currency strategist at Wells Fargo Bank in New York.
In late afternoon trade in New York, the euro <EUR=> was up 0.7 percent on the day to stand at $1.3310 after trading as high as $1.3342, according to Reuters data.
This week, concerns about Greece's escalating debt crisis and worries about credit risks in other vulnerable euro zone states had pushed the euro to a one-year low against the dollar.
Germany's finance minister on Friday said that Berlin, which is expected to carry the brunt of the cost of helping Greece, could wrap up action on a law approving Germany's share of the aid package in a week, ahead of regional elections. For more see [ID:nBAT005367].
Euro zone finance ministers will meet on Sunday to discuss Greece and will hold a news conference afterward. A spokesman said the group would likely give a figure for the euro zone-International Monetary Fund loans through 2012 for Greece. [ID:nBRU010776] and [ID:nBRU010777]
Analysts said a final announcement of the aid package was likely to boost the euro, although the single currency would stay fragile as investors wait to see if Greece can make painful budget cuts to put its financial house in order.
Most Greeks would take to the streets if the government agreed new austerity measures, a poll showed on Friday as the government negotiated tax hikes and spending cuts as part of the EU/IMF aid deal. [ID:nATH005438]
The euro was down 1.5 percent against the dollar in April at current prices, using electronic trading platform EBS data, its fifth straight month of declines <EUR=EBS>. Concerns about Greece's deficit problems have knocked the euro down around 12 percent against the dollar since Nov. 30.
In the United States, a report showing the economy grew at a slightly slower-than-expected pace in the first quarter had little impact on the greenback. Despite the below-forecast headline number, analysts said the GDP report shows signs of an improving economy. [ID:nN2926503]
"We're seeing the beginning of the process of a broad-based recovery," said Michael Woolfolk, a senior currency strategist at BNY Mellon in New York. "Personal consumption has improved -- it's the strongest since the Lehman crisis. I'm very encouraged by that."
Serebriakov and other traders said month-end rebalancing flows were favoring the euro.
It rose more than 1 percent against the yen <EURJPY=> to hit a session high at 125.95 yen, then pared gains to trade up 0.6 percent at 125.05 yen as the New York trading day began to close.
"The euro's being helped up on month-end fixing and there's also some position-squaring on euro shorts ahead of the long weekend in the UK," said RBS currency strategist Paul Robson.
The dollar rose as high as 94.60 yen <JPY=> before giving back gains to trade at 93.92 yen, down 0.1 percent from the prior close. (Additional reporting by Naomi Tajitsu in London; Editing by Leslie Adler) (Reporting by Nick Olivari and Vivianne Rodrigues)