Euro rallied on hopes of aid to Greece

NEW YORK (Reuters) - The euro rebounded Tuesday from a minimum of nine and a half months against the dollar as investors await new austerity plans for Greece to meet its debt crisis and the possibility that receives aid from the European Union .

Earlier, the euro fell to $ 1.3435, its lowest level since May 2009, after the largest union of public sector in Greece on Tuesday convened a 24-hour strike on March 16 to protest against Athens plans to reduce its massive debt.

Analysts said the news about the Cabinet of Greece would meet Wednesday to make decisions about the economy helped push the euro through its minimum, while it reduced the spread between the notes of the Greek debt to 10 years and the roles of benchmark German debt.

"It is expected to announce austerity measures tomorrow, and a record short position in euro, some people are trying to get comfortable on the margins," said Michael Malpede, Easy Forex analyst in Chicago.

"If there is a credible plan, increase the possibility of help from the EU but do not think that this already adopted," he said.

The euro closed its operations in New York up 0.4 percent at $ 1.3606, near a session high of $ 1.3617, its lowest level and away from the day's $ 1.3435. Against the yen, the euro was virtually unchanged at 120.75 yen while the dollar fell 0.4 percent to 88.73 yen.

According to the Commodity Futures Trading Commission, the speculators betting against the euro currency hit a record high in the week ended Feb. 23.

Traders said the euro had been oversold, helping the currency recover some of their losses. "But I think people are waiting to sell new minimum levels," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman in New York.

Analysts said the next level of support that the market will test the euro was $ 1.3405.

Moreover, the Canadian dollar rose to session highs against its U.S. counterpart after the Bank of Canada kept interest rates unchanged, as expected, but said the country's economic growth has been slightly higher what the bank projected in its January report.

The greenback fell to a session low at $ 1.0311 Canadian, according to Reuters data, to close later in 1.0360 units, falling 0.5 percent on the day.

(Additional reporting by Zhou Wanfeng)