The euro approached a 2010 low against the dollar earlier on Thursday but rebounded strongly after the head of the European Central Bank said Greece was not in danger of defaulting on its debt.

The single currency extended Wednesday's weakness in Asia and price fell to an intra-day low of 1.3282 in European morning as the Greek/German 10-year government bond spread hit a record high of 432 basis points. However, euro swiftly rebounded from there on short-covering as ECB's president Trichet said that default is not an issue for Greece in a news conference after ECB kept rates unchanged at 1.0%. Trichet also stated the plan agreed by euro zone leaders last month to help Greece is a 'workable framework'. In other news, the Greek government said that Greece’s first-quarter budget deficit fell 40 percent and narrowed to 4.3 billion euro from 7.1 billion euro in the same period a year earlier, claiming that the country would be on track to achieve its 2010 goal for cutting the EU’s widest budget shortfall. Euro rose to as high as 1.3367 in NY morning before moving narrowly.

Although the British pound tumbled to 1.5141 in European morning in tandem with euro's weakness, the pair rebounded strongly after the release of a series of stronger-than-expected economic data. U.K. industrial production came in at 1.0% m/m and -0.1% y/y (forecast was 0.5% m/m and -0.5% y/y) whilst manufacturing production rose by 1.3% m/m and 1.4% y/y versus economists' forecast of 0.7% m/m and 0.9% y/y. U.K. Halifax house prices also rose by 1.1% m/m and 5.2% 3mth/y in March versus the forecast of 1.6% m/m decrease and 4.5% rise 3mth/y. Cross buying in pound versus euro and the Japanese yen also lifted cable as gbp/jpy rose from 140.99 to 142.81 and eur/gbp fell from 0.8785 to 0.8738. Sterling advanced to an intra-day high at 1.5280 in NY afternoon. In other news, Bank of England kept interest rates at a record low of 0.5% for the 13th month as expected and made no increase to its 200 bln pound asset-buying scheme.

Economic data to be released on Thursday include: Germany Trade balance and Current account, U.K. PPI and Canada Unemployment rate.