* Euro rebounds vs dollar after nearing 2010 low
* Chinese revaluation speculation grows
* ECB's Trichet says default not an issue for Greece (Updates prices, adds detail, changes byline)

By Steven C. Johnson

NEW YORK, April 8 (Reuters) - The euro approached a 2010 low against the dollar on Thursday but rebounded after the chief of the European Central Bank assured markets that Greece was in no danger of defaulting on its debt.

The yen relinquished earlier gains as the reassurance by ECB President Jean-Claude Trichet on Greece eased market risk aversion, while a news report fed speculation that China may be gearing up to revalue the yuan.

Earlier, the euro fell below $1.33 as investors unloaded Greek assets, driving up Greece's borrowing costs and raising doubts about whether the euro zone country can remain solvent.

But the currency retraced losses after Trichet said that default is not an issue for Greece and called a joint European Union-International Monetary Fund aid plan for Greece workable.

Trichet helped boost demand for the euro, said Michael Malpede, analyst at Easy Forex in Chicago, adding the ECB chief's remarks may have calmed some of the jitters ... over the Greek debt situation.

The euro was up 0.1 percent at $1.3345 after earlier falling to $1.3282, less than half a cent from its 2010 low. It was little changed at 124.66 yen EURJPY=. The dollar rose 0.1 percent to 93.40 yen after earlier dropping to 92.84 yen.

Japan's currency tends to do well when investors become risk averse and unwind trades financed with cheaply-borrowed yen.

The cost of protecting Greek government bonds against default and the gap between 10-year Greek and German bonds both hit record highs, but retreated after Trichet spoke. [ID:nLDE6371XM].

The uncertainty surrounding the situation with Greece is a negative for the euro, said Sophia Drossos, co-head of global currency strategy at Morgan Stanley in New York. The market is really unsure of the commitment other European countries and the IMF have to backstopping Greece.

Sterling showed little reaction to the Bank of England's decision to keep interest rates unchanged, as expected. It was last up 0.1 percent $1.5256. The ECB also held rates steady at 1 percent on Thursday.


Speculation about a firmer Chinese yuan grew after The New York Times said China was close to announcing a shift in currency policy involving a small but immediate yuan revaluation.

On the spot market, the yuan rose to its highest level against the dollar since October, while three-month dollar/yuan offshore non-deliverable forward contracts, or NDFs, hit their lowest level since July 2008. [ID:nTST000063].

NDFs allow investors to speculate on yuan moves using previously agreed exchange rates for a future date while avoiding the spot market, which is tightly controlled.

The yen also 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 link has weakened in recent years.

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. [ID:nN08174034] (Editing by Leslie Adler)