* Euro hits 9-1/2-month low of $1.3435, then rebounds
* Report of possible Greek econ plan lifts euro from lows
* Canadian dollar gains after BoC announcement
(Adds comment, updates prices, changes byline)
By Steven C. Johnson
NEW YORK, March 2 (Reuters) - The euro rebounded from a
9-1/2-month low against the dollar on Tuesday as investors
awaited new plans to address Greece's debt crisis and held out
hope for some type of help from the European Union.
Earlier, the euro dropped as low as $1.3435, its lowest
level since May 2009, after Greece's biggest public union
called for a 24-hour strike on March 16 to protest expected
austerity measures from Athens. For more, please see
[]
Analysts said news that the Greek cabinet would meet on
Wednesday to make decisions about the economy helped lift the
euro from its trough as the spread between 10-year Greek and
German government bonds narrowed.[]
"They're expected to announce austerity measures tomorrow,
and with a record short position in the euro, some people are
trying to get to the sidelines. It's prudent trading," said
Mike Malpede, senior strategist at Easy Forex in Chicago.
"If there's a credible plan, it increases the odds of help
from the EU, but I don't think that's a foregone conclusion."
The euro was last changing hands at $1.3605 <EUR=>, near a
session peak of $1.3617 and well off its $1.3435 session low.
It was little changed at 120.85 yen <EURJPY=> while the dollar
was down 0.3 percent at 88.85 yen <JPY=>.
According to the Commodity Futures Trading Commission,
speculative bets against the euro hit a record high in the week
ended Feb. 23.
Traders said the euro had become a bit oversold, helping it
recover some losses. "People, though, I think, are generally
looking for new levels to sell it," said Marc Chandler, head of
currency strategy at Brown Brothers Harriman in New York.
A Reuters poll on Tuesday showed economists expect Greece
will probably fail to rebuild its finances convincingly this
year and its crisis will likely continue through 2010.
[]
Technical analysts said the next support level to be tested
for the euro was $1.3405 -- the 61.8 percent retracement of the
rally from the 2008 low of $1.2328 to 2009's high at $1.5144.
CANADA DOLLAR RISES
The Canadian dollar rose to a session high against the U.S.
dollar after the Bank of Canada left interest rates unchanged,
as expected, but said economic growth had been slightly higher
than the bank projected in the January report. For the BoC
statement see []
The greenback fell to session lows at C$1.0311 <CAD=>,
according to Reuters data, and last traded at C$1.0326, down
0.9 percent on the day.
The pound <GBP=D4> fell 0.2 percent to $1.4966 after
worries over a potential hung Parliament in the UK had knocked
sterling to a 10-month low of $1.4781 on Monday.
The Australian dollar <AUD=D4> rose 0.4 percent to $0.9093,
extending gains after the Reserve Bank of Australia hiked
interest rates to 4 percent and flagged further increases.
[]
The euro briefly hit a session high of 1.4653 versus the
Swiss franc <EURCHF=>, with some traders citing activity by the
Swiss National Bank. The SNB declined to comment.
The euro last traded at 1.4633 francs, flat on the day.
(Additional reporting by Wanfeng Zhou; Editing by Dan
Grebler)
