* Trichet gives no guidance on bond buying
* Euro briefly lifted by Spanish, French bond auctions
* U.S. jobless claims rise in the latest week (Recasts, add Trichet comments, updates prices, changes byline, dateline; previous LONDON)
By Gertrude Chavez-Dreyfuss
NEW YORK, Dec 2 (Reuters) - The euro rose in volatile trading on Thursday, boosted by reports the ECB was buying euro zone bonds after its president Jean-Claude Trichet disappointed investors by not announcing an aggressive bond-buying program.
The common currency, however, should remain under pressure due to uncertainty about the outlook for euro zone peripheral countries given the debt crisis in the 16-member grouping.
In tandem with the euro's rise, the premium that investors demand to buy Portuguese and Irish debt over German benchmarks fell on Thursday, with traders saying the European Central Bank had been buying the two countries' bonds. That caused the euro to recover from losses triggered after Trichet's remarks.
"We had been hearing talk that the ECB has been buying peripheral bonds," said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto. "As a result, we have seen yields in those bonds fall and the euro rise."
Market participants had been expecting the ECB to unveil an aggressive new bond buying program. Instead the ECB extended nonstandard provisions, committing to provide unlimited one-week, one-month and three-month funding for vulnerable euro zone banks until at least April, a move viewed by the market as too soft.
"People were geared up to hear about new extraordinary measures. What they didn't want to see was any talk at all about an exit strategy." said Boris Schlossberg, director of research at GFT Forex in New York.
"The market is starting to fear not only that they're not doing anything to help the current crisis, but may actually be exacerbating it. That caused the euro to dip lower."
In midmorning New York trading, the euro was up 0.3 percent at $1.3187, with session lows at $1.3060 in the wake of Trichet's remarks.
Traders said hedge funds and other short-term players such as commodity trading advisors earlier sold euros and bought the dollar against the Swiss franc. The dollar, however, has now fallen versus the franc to 0.9945 francs.
EURO/DOLLAR SHORT-TERM BIAS NEUTRAL
Overall, the intraday bias in euro/dollar remains neutral for now as the currency consolidates from lows at $1.2969 earlier this week, traders said. Another rise cannot be ruled out, according to ActionForex.com analysts, at the hourly 55-day exponential moving average around $1.3279. But they said strong resistance is expected at $1.3447.
Some analysts were not surprised the ECB is not engaging in any new bond buying program as many members of the bank have opposed any such action.
"So unless the now highly politicized situation is resolved, the euro is likely to continue to be under pressure in the near term, which is our expectation because a lack of consensus in the ECB and EU would make credible and substantial responses hard to come by," said Aston Chan, portfolio manager at global macro hedge fund GLC in London. GLC has assets under management of around $1.2 billion.
The ECB has been under pressure to soothe market sentiment after a bailout plan announced for Ireland last month stoked speculation that other euro zone nations struggling to repay their debts may also seek help from the European community.
The dollar was down 0.3 percent against the yen at 84.20 after a rise in the latest U.S. weekly jobless claims. Robust U.S. data and higher U.S. bond yields have been supportive of the greenback of late. (Editing by James Dalgleish)