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* Euro edges near 2010 low versus U.S. dollar
* Yen gains as yuan revaluation speculation grows
* Greek/German 10-year yield spread at euro-lifetime high
* Default not an issue for Greece: ECB's Trichet
(Updates prices, adds quotes, changes byline, changes
dateline, previous LONDON)
By Wanfeng Zhou
NEW YORK, April 8 (Reuters) - The euro fell to near its
lowest level this year against the dollar on Thursday on
growing doubts about Greece's ability to tackle its debt
crisis, while speculation about a possible yuan revaluation
boosted the yen.
The euro slightly trimmed losses, though, after European
Central Bank president Jean-Claude Trichet said he expects the
euro zone to grow at a moderate pace in 2010, while Greece is
not in danger of defaulting. The ECB earlier left rates at a
record low of 1 percent. See []
Increasing skepticism among investors about Greece's
finances drove Greek yield spreads higher, taking the spread
over 10-year German Bunds to its widest in the lifetime of the
euro. []
The yen strengthened after the New York Times reported that
China was close to announcing a shift in its currency policy
involving a "small but immediate" revaluation of the yuan,
which rose to its highest since October. []
"Greece and to a lesser extent China are back in the
forefront right now," said Win Thin, currency strategist at
Brown Brothers Harriman in New York.
In early New York trading, the euro <EUR=> was down 0.2
percent at $1.3320. It had earlier hit a low around $1.3282,
according to Reuters data, near its 2010 trough of $1.3267 set
in March on electronic trading platform EBS, which was also its
lowest since May last year.
Traders said loss-cutting sell orders were likely below
$1.3260 and they expect small support around $1.3200 and
1.3100.
The ECB expects the euro area economy to expand "at a
moderate pace in 2010 in an environment of uncertainty, with a
growth pattern possibly being uneven," Trichet told reporters
at his monthly news conference. See []
"His comments are pretty much as expected. He did say he
expects moderate recovery in 2010," said Jacob Oubina, senior
currency strategist at Forex.com in Bedminster, New Jersey.
YEN GAINS
The market was watching for signals on whether China will
let the yuan rise as U.S. Treasury Secretary Timothy Geithner
and Chinese Vice Premier Wang Qishan exchanged views on
U.S.-China economic relations and the global economy during a
meeting in Beijing. []
The yen rose broadly, with the dollar <JPY=> falling as low
as 92.84 yen. Gains came as dollar/yuan three-month
non-deliverable forwards fell to their lowest since July 2008
and spot yuan <CNY=CFXS> rose to its highest since October
2009. []
The yen tends to benefit from any yuan appreciation as
investors use Asia's most liquid and flexible currency as a
proxy for other less flexible currencies in the region, though
some analysts said that relationship has weakened in recent
years.
Concerns that an appreciation in the Chinese currency would
weigh on Chinese growth and dampen its demand for commodities
weighed on commodity-linked currencies.
The Australian dollar <AUD=D4> fell 0.2 percent to $0.9251.
The U.S. dollar was broadly supported on increased risk
aversion, rising 0.41 percent against a basket of currencies
<.DXY> to 81.776.
Sterling showed little reaction to the Bank of England's
decision to keep interest rates unchanged, as expected. It was
last 0.3 percent lower at $1.5202 <GBP=>, pressured by
uncertainty surrounding the outcome of a looming UK election.
(Additional reporting by Gertrude Chavez-Dreyfuss, Nick
Olivari and Jessica Mortimer in London; Editing by Padraic
Cassidy)
