* ECB's Provopoulos: Greece can repay debt in full
* Weak run of data undermines U.S. dollar
* Result of key IMF review due next week (Updates prices, adds quote)
By Gertrude Chavez-Dreyfuss
NEW YORK, May 27 (Reuters) - The euro took off against the dollar on Friday, helped by comments out of Europe suggesting that Greece should be able to handle its heavy debt load.
The euro, however, hit a record low versus the Swiss franc, as did the dollar, indicating investors remained worried that sovereign debt problems in Europe, a divisive budget debate in Washington, and low U.S. interest rates that would hamper both currencies.
The euro's rally versus the dollar gained momentum in the New York session after a member of the European Central Bank Governing Council, George Provopoulos, said Greece will be able to repay its debt in full without restructuring if it sticks to an austerity plan. For details, see [ID:nFAT007211]
The comments by Provopoulos, who is also head of Greece's central bank, were followed by remarks from French President Nicolas Sarkozy, who said France would defend and support the euro. Sarkozy also said the country opposed any kind of debt restructuring for Greece. [ID:nP6E7GA026]
Dean Popplewell, chief currency strategist at OANDA in Toronto, said the euro may have seen its low against the dollar for now and overall he expects a positive outcome to Greece's debt situation.
The International Monetary Fund is expected to finalize next week its fourth review of the Greek economy. At stake is a 12 billion euro tranche that Greece would get on approval of the review, which may show that Greece is having difficulties sticking to the planned reforms.
Danske Bank chief analyst Allan von Mehren said he expects the IMF to pay the 12 billion euros due next month.
"If not, it would not only be seen as a Greek failure, but also an IMF" failure after the scandal involving ex-IMF head Dominique-Strauss-Kahn, he said.
In midday, New York action, the euro
Above that, traders said the euro's resistance is around $1.43396 -- the 38.2 percent retracement of its decline this month.
Overall, the euro was up 0.9 percent this week, recovering from weekly losses of more than 3 percent two weeks ago.
The euro was also helped by a broadly weak dollar amid a run of softer U.S. economic data the last few days. On Friday, the government said U.S. consumer spending rose 0.4 percent in April, lower than expectations of a 0.5 percent increase. [ID:nN271881]
On Thursday, a report showed an unexpected rise in U.S. initial jobless claims, while a revised government estimate on first-quarter gross domestic product came in below most forecasts.
"Softer U.S. data may renew the debate about the introduction of a third round of quantitative easing, and that's a negative for the dollar," said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto.
The ICE Futures' dollar index <.DXY>, measured against six major currencies, fell 0.8 percent to 74.978.
Overall, the combination of negative dollar sentiment and concerns about heavy euro zone debt is expected to keep the euro in a range above $1.40 but below last Friday's high around $1.43458.
The Swiss franc, which again hit a record high versus the euro, was seen continuing its climb as Switzerland's economic and fiscal health far outshines that of the overall euro zone.
The euro fell 0.5 percent against the franc to 1.21750
The dollar also dropped to record troughs at
0.85111
Analysts said the franc was boosted by a strong reading of the KOF economic indicator for May and the view that Swiss interest rates will rise in the coming months. [ID:nZCHQGE790]
The dollar hit a three-year low versus the New Zealand
dollar