NEW YORK ( TheStreet) -- The U.S. dollar retreated from a new 10-month peak against a basket of currencies as some near-term concerns about Greece's credit crisis subsided.The euro tumbled to a 10-month trough against the greenback and a 30-month low against the Canadian dollar yesterday, despite the announcement of a draft proposal for financial aid for Greece, which will be funded by EU states and the IMF. Initially, ECB President Trichet called the IMF's involvement in any deal "very, very bad," comments that triggered a steep drop in the EUR. Mr. Trichet later softened his tone, calling the proposed Franco-German-IMF plan "workable." The fact that a safety net for Greece has been achieved should help the euro regain its footing and assuage some broader worries about sovereign credit risk. However, many questions remain unanswered and markets remain very skeptical of Athens' ability to implement the strict fiscal reforms that would be accompanied by any financial aid. Consequently, the euro's upside could remain very limited in the months ahead. Sterling recovered from lows against the greenback and Canadian dollar, in-line with the broad improvement in market sentiment overnight. However, going forward, the pound will remain dogged by the U.K.'s lackluster recovery and mounting political uncertainty ahead of a general election around the middle of this year. Investors will respond to the final revision to U.S. GDP for the fourth quarter and the University of Michigan's consumer sentiment index released this morning. EUR The euro bounced off a 10-month trough against the USD, a 30-month trough against the CAD and a record low against the AUD. Yesterday, European leaders agreed to a draft proposal to provide financial aid to indebted Greece, which would provide Athens with bilateral loans from euro zone countries and the IMF. The aid, estimated at around 22 billion euros, would only kick in in an emergency and would be accompanied by strict conditions. Greece's Prime Minister said the deal greatly helped reduced the risk of default and highlighted the fact that Europe is able to take important steps in the face of great challenges. However, the IMF's involvement in the deal, something pushed for by Germany, highlights to many that the bloc is in fact, incapable of dealing with its worst crisis in its 11-year history.
USD U.S. GDP for the final quarter of 2009 was revised down to 5.6% (annualized) from the originally reported 5.9%. Final sales, the measure of total business and consumer spending, fell from 1.9% (q/q) to 1.7% (q/q), highlighting the still soft state of demand in the economy.Business inventories, the key driver of growth in the quarter, were revised from an originally reported -$16.9 billion to -$19.7 billion. While the figures are considered "old news" at this point, it is important to note that the surge in growth in the fourth quarter was largely due to inventory readjustment and stimulus spending. Until final demand recovers, growth in the economy will not be seen as sustainable. The dollar was mostly unmoved by the news, with investors looking to consumer morale data this morning.