Papandreou, in a speech later Thursday, offered to hold talks with the opposition to resolve the crisis, saying he could drop the referendumif the opposition backed the bailout deal in parliament. At the same time, the EU's bailout plan, which includes the bailout of Greece, is a key topic at the G20 leaders meeting in Cannes. Papandreou surprised European leaders with his announcement of the referendum, earlier this week.
The euro was at a high of 1.3829 at one point, and was at 1.3757 in late morning. By early afternoon, it was above 1.38, well off its intraday low of 1.365. U.S. stocks meanwhile surged on the open, then fumbled with mixed headlines from Europe and on Draghi's comments, but rebounded again, giving the Dow a triple digit gain. At one point, both the Nasdaq and S&P 500 were negative. The S&P 500 was up nearly a percent in late morning.
"You definitely have a skittish market," said a stock trader, who was watching the foreign exchange market, which was watching the European headlines.
Mary Nicola, BNP currency strategist, said it's impossible to predict the euro's end point Thursday, but that the market will eventually focus on the rate cuts in Europe. The benchmark rate had been 1.5 percent, raised recently on concerns about inflation, but also at a time when many economists had started to worry about the strength of the European economy.