* Euro higher versus dollar, but down versus yen
* Italian debt auction shows lower demand for Rome paper
* Greece, France, Germany to speak Wednesday-official (Updates prices, adds quote, changes byline)
By Wanfeng Zhou
NEW YORK, Sept 13 (Reuters) - The euro edged higher from a seven-month trough against the dollar on Tuesday, helped by a rebound in equity prices, but the lower trend looked to remain as Europe's debt crisis worsened.
The yen advanced against both the dollar and euro, suggesting investors remained cautious about taking on risk and keeping alive the possibility of intervention by Japan to weaken its currency. The yen has been the primary beneficiary of safe-haven flows after the Swiss National Bank took aggressive actions recently to weaken the Swiss franc.
France on Tuesday confirmed an earlier report that Greek, German and French leaders would hold a conference call on Wednesday. The news, combined with a recovery in French bank shares, boosted the euro.
But few investors believed the currency's rebound would be sustained after a disappointing Italian debt auction that saw borrowing costs soar and as fears persisted that Greece would default on its debt.
"The trend is still down for the euro," said Win Thin, senior currency strategist at Brown Brothers Harriman in New York. "The underlying dynamics for Greece, Italy and all these guys are still the same, so I remain very negative on euro zone."
The euro last traded at $1.3705
The euro briefly pared gains after market talk that a Dutch finance official saw a Greek debt default as unavoidable, though this was later denied. For details, see [ID:nS1E78C1BI]
Earlier, the euro came under pressure after the French president's office said no Franco-German statement on Greece was planned for Tuesday, dashing hopes that there would be some kind of support of for the debt-laden country.
On Monday, the euro had fallen as low as $1.34949, its weakest since February.
Against the yen, the single currency fell as low as 104.410
Full coverage of the euro zone debt crisis [ID:nLDE78B08T]
BREAKINGVIEWS column on French banks [ID:nL5E7KC126]
Euro zone crisis in graphics http://r.reuters.com/hyb65p ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
SELL ON BOUNCE
Traders said real money remained a seller on rallies, with small sell-stop orders clustered around the $1.3720/25 level.
Key levels on the downside in the euro are now the February low around $1.34280 and the 50 percent retracement of the euro's June 2010-May 2011 rally around $1.34082.
Pressure on the euro mounted after Italy paid higher borrowing costs to sell a new five-year bond. [ID:nL5E7KD1G0]
Euro stress was also being triggered by persistent talk that French banks could be downgraded by ratings agencies.
The dollar fell 0.5 percent to 76.84 yen
The euro
"We still see a lot of risk aversion amongst investors," said Samarjit Shankar, managing director of global FX strategy at BNY Mellon in Boston. "Fundamentally we're still seeing the dollar, Swiss and yen being net bought and most of the other riskier emerging market and G10 currencies being net sold." (Additional reporting by Gertrude Chavez-Dreyfuss; Editing by Dan Grebler)