The euro rose toward a one-month high against the dollar after European Central Bank president Jean-Claude Trichet indicated his willingness to sanction bond rollovers in Greece.

The euro climbed 0.5 per cent to 117.36 yen. It reached $1.4658 yesterday, the highest level since May 5th.

While Mr Trichet opposed imposing losses on creditors, he said the ECB is not opposed to private-sector creditors being asked to "maintain their level of outstanding credit," he said in Montreal yesterday.

"That is not a default. That is something the European Central Bank would consider appropriate."

The ECB is considering a rollover of bonds as an alternative means of easing Greece's funding squeeze, two officials familiar with the matter said last week on condition of anonymity.

However, the euro came under pressure yesterday after Jean-Claude Juncker, chairman of the Eurogroup, said the common currency was overvalued.

"Those comments (from Juncker) probably weighed on the euro at the margins. But the direction of a weaker dollar is pretty clear at this point in time, so I'm expecting a bounce in the euro," said Richard Grace, chief currency strategist at Commonwealth Bank in Sydney.

The euro has gained more than 4 per cent since climbing off its May 23rd trough. The immediate target for the common currency is $1.4732, a 78.6 per cent retracement of its May 4 to May 23rd fall.

Agencies