By Dennis Pettit

NEW YORK, May 20 (MNI) - A day of violent price swings in currency markets Thursday left the euro with hefty gains vs the dollar while the dollar slipped just slightly vs the yen.

Euro-dollar was changing hands at $1.2575 in afternoon dealings Thursday, close to the $1.2600 high of the session, the euro holding at its best level of the last week as a massive squeeze of euro short positions exploded in afternoon trading Thursday.

By Vicki Schmelzer

NEW YORK (MNI) - Emerging market currencies saw a larger purge of global investor positions Thursday, with many currencies revisiting or slipping below the lows seen May 6, the day U.S. stocks took a larger tumble.

The carnage was evident across the board, from the Korean won to the Brazilian real to the South African rand.

The emerging market instrument sales came in tandem with selling of commodities and commodity FX, with Aussie and Canadian dollars heavily battered.

BERLIN (MNI) - The German government cabinet will adopt in two weeks a bill confirming the ban on short selling introduced by directive this week, Finance Minister Wolfgang Schaeuble said Thursday.

"We will draw up the law very quickly," Schaeuble announced at a conference on financial market regulation here. "We will adopt a draft law in the cabinet in the week after next."

By Heather Scott

WASHINGTON (MNI) - The International Monetary Fund did not call for private sector wage cuts in Greece, nor were they thought to be necessary, though the nation will need to improve competitiveness to spur growth and job creation, IMF External Relations Director Caroline Atkinson said Thursday.

Atkinson said the IMF did not seek an end to the practice of paying workers 14 months salary each year.

FRANKFURT (MNI) - The objective of monetary policy should remain the pursuit of price stability, and monetary policy should not be asked to do too much, Bank of England Deputy Governor Paul Tucker said Thursday.

Nevertheless, monetary policy does itself no favors if it claims that its actions are irrelevant to credit and asset price booms, Tucker told an audience here at a symposium honoring departing ECB Vice President Lucas Papademos.

FRANKFURT (MNI) - The Swiss National Bank will counter an excessive appreciation of the Swiss Franc against the euro, which may come under more pressure due to the Eurozone's sovereign debt crisis, SNB board member Thomas Jordan said Thursday.

The SNB is walking tightrope, trying to avert a fresh downturn amid the Eurozone's sovereign debt crisis while assuring price stability over the longer term, Jordan said in the text of a speech issued in advance.

BERLIN (MNI) - Finnish Finance Minister Jyrki Katainen on Thursday praised the EU financial rescue package, but cautioned that the real economic problems of the Eurozone still persist.

"We have managed to buy some time," Katainen said at a conference on financial market regulation here. But "the real economic problems are still there."

The minister called the rescue packages "really creative." The fact that an agreement on these measures was reached has shown "that there is some political leadership in this continent."

BRUSSELS (MNI) - The European Union needs to address the problem of abusive short-selling but actions would be more effective if coordinated at the European level, the European Commission said on Thursday.

Germany late Tuesday announced a ban on some short-selling of Eurozone government debt and shares of major German financial companies, which pressured the euro and sent stock markets across Europe tumbling.