LONDON (AFP) - The euro and British pound rose against the dollar on Friday amid easing fears about huge European debt levels, analysts said. The European single currency climbed to 1.2395 dollars from 1.2388 dollars late in New York on Thursday. The pound gained to 1.4872 dollars from 1.4825 dollars. Against the Japanese unit, the dollar fell to 90.76 yen from 90.98 yen on Thursday. While the news flow out of Europe started this week negative, a good Spanish bond auction ... and the potential for a coordinated bank stress test across the euro area are beginning to get things right, Barclays Capital analysts wrote in a note to clients. The Spanish Treasury raised 3.479 billion euros (4.30 billion dollars) by selling bonds on Thursday but at higher rates as investors sought more reward for lending after recent debt scares. The auction came after market sentiment was dampened by rumours of possible strains within the Spanish banking system and suggestions that Spain might need a bailout amounting to 200-250 billion euros. Euro-dollar remains in a careful recovery mode, said Commerzbank analyst Ulrich Leuchtmann. Yesterday it became clear that rumours Spain was about to apply for aid payments ... were completely unfounded. European Union leaders have meanwhile agreed to publish the results of so-called stress tests for banks in the second half of July in a bid to reassure investors. But currency analysts said they remained generally bearish for the single currency. This could turn out to be a key stepping stone towards increasing the transparency of the eurozone banking sector, Credit Agricole CIB Asia Research analyst Mitul Kotecha said. However, doubts will remain until there is some clarity on the terms of the tests such as whether they include details of sovereign debt exposure. It still looks like an environment of sell on rallies for the euro and other risk currencies, with their gains likely to run out of steam over coming days, he added. The British pound meanwhile rose on Friday as Britain reported better-than-expected borrowing data for May, on Friday. The country had a public deficit of 16 billion pounds (19.2 billion euros, 23.8 billion dollars) in May, official data showed ahead the governments austerity budget next week aimed at bringing down Britains massive debt. In London trading on Friday, the euro was at 1.2395 dollars against 1.2388 dollars on Thursday, at 112.50 yen (112.70), 0.8334 pounds (0.8353) and 1.3765 Swiss francs (1.3772). The dollar stood at 90.76 yen (90.98) and 1.1106 Swiss francs (1.1116). The pound was at 1.4872 dollars (1.4825). On the London Bullion Market, the price of gold dipped to 1,244.40 dollars an ounce from 1,245 dollars an ounce on Thursday.