* Euro in volatile trade; ECB's Trichet comments weigh
* Euro down 7 percent year to date against the dollar (Recasts, updates prices, adds quote)
NEW YORK, March 25 (Reuters) - The euro fell to a 10-month low against the dollar on Thursday after a European draft agreement on aid for debt-stricken Greece showed that the euro zone and the International Monetary Fund will share the load.
The euro, in a day of volatile trade, had earlier plunged after European Central Bank President Jean-Claude Trichet said that if the IMF took responsibility for bailing out Greece it would send a negative message.
Investors took away the view that if the IMF took the lead in aiding Greece it would reflect negatively on Europe's ability to handle its own problems. [ID:nPAB008260].
Under the draft agreement, most of the financial burden will be shouldered by the euro zone and Athens must request it.[ID:nWEB7464]
The aid for Greece from the 15 other countries also using the euro would come via bilateral loans, according to the draft statement obtained by Reuters. [ID:nLDE62O2IM] EU sources said the euro zone would shoulder two-thirds of the burden, with the IMF picking up one-third. [ID:nWEB7466].
"You have to be completely supportive of your monetary union or what is the point of maintaining that common currency?" said Sacha Tihanyi, currency strategist at Scotia Capital. "In for a penny, in for a pound."
In late afternoon trading in New York, the euro was down 0.2 percent at $1.3283, after dropping earlier to $1.3279, according to Reuters data, its lowest since May 2009. Only last week, the euro traded above $1.38.
The euro swung between gains and losses through the global session, falling first to a 10-month low in Asia trading, rebounding as investors bet the EU summit could lead to a potential aid package to Greece, then falling again on Trichet's comments.
The euro touched a session high of $1.3386 in New York trading after the office of French President Nicolas Sarkozy said that Sarkozy and German Chancellor Angela Merkel agreed on a joint approach ahead of the EU summit. [ID:nPAB008259] and [ID:nBAT005272]
Earlier, Jean-Claude Juncker, the chairman of the finance ministers of the euro zone, said after preparatory talks among conservative leaders, including Merkel, that he was more confident than before of reaching a deal on Greece by Thursday night. [ID:nLDE62N2R1]
"There's going to be a lot of volatility during this meeting," said Boris Schlossberg, director for currency research at GFT, in New York. "The euro will bounce back and forth."
A Fitch Ratings downgrade of Portugal's sovereign debt on Wednesday was a reminder that debt concerns in the euro zone are not confined to periphery nations. Worries over debt sustainability in Greece and other smaller countries in the euro zone have helped push the euro down 7 percent against the dollar this year.
The dollar was up 0.6 percent at 92.75 yen <JPY=>, after going as high as 92.95, its highest since Jan. 8. The pair broke above its 200-day moving average, signaling further gains.
A report showing the number of U.S. workers filing new applications for unemployment insurance fell last week gave some support to the greenback versus the yen. [ID:nN24208358]
Elsewhere, U.S. Federal Reserve Chairman Ben Bernanke told lawmakers that the U.S. economy still needs help from the central bank's ultra-low interest-rate policy. But he said the Fed stands ready to remove stimulus once the expansion "matures." [ID:nWEQ003846] (Reporting by Nick Olivari and Vivianne Rodrigues; Additional reporting by Steven C. Johnson in New York and Jessica Mortimer in London; Editing by Leslie Adler)