By Deborah Levine & William L. Watts, MarketWatch NEW YORK (MarketWatch) -- The dollar declined versus major rivals Monday, with the euro extending a rebound that began last week amid agreements from European leaders to support Greece, allowing the debt-laden country to say it will try to issue 7-year, euro-denominated bonds. The euro (CUR_EURUSD 1.3448, -0.0022, -0.1633%) rose to $1.3456, up from $1.3411 in late North American trading on Friday. The single currency had pressed above $1.3500 in earlier action. The dollar index (DXY 81.39, -0.01, -0.01%) , which measures the U.S. unit against a trade-weighted basket of six major currencies, fell to 81.368, down from 81.628 late Friday. The euro fell to 10-month lows last week, then rebounded after euro-zone officials said they had agreed on a standby aid plan that included support from the International Monetary Fund. Greece on Monday moved to test the waters in the wake of the contingency plan, announcing it would issue debt to raise 5 billion ($6.7 billion) euros. Guidance for Greece's bond sale was at 310 basis points over mid-swaps, equal to a yield of around 6%, according to traders. Read about the bond sale. "We think the deal will go well, but Greece continues to pay a high premium to come to market," said Andrew Brenner, head of emerging markets at Guggenheim Securities. The outcome of the debt sale will be a crucial test not only for Greece, but could raise concerns about the strength of the European Union as a whole, analysts said. "A poor response to the sale will raise the likelihood that Greece will be forced to ask for financial assistance and Germany, despite recent protests, is likely to be the biggest contributor under the new support plan," Brian Dolan, chief currency strategist at Forex.com, wrote in a note. "Poor results in the next Greek bond sale would also increase the risk of contagion to Portugal and this could intensify the pressures on the new support mechanism, on Economic and Monetary Union and on the euro." Meanwhile, the European Commission's economic sentiment indicator for the 16-nation euro zone rose 1.8 points in March to 97.7. The commission said the upward trend in economic sentiment appears to have regained momentum after a February pause. Economists had forecast the indicator to rise to 97.4. The dollar showed little reaction to the only U.S. economic report of the day, which showed consumer spending rose as expected last month and incomes were flat. Currency markets saw little reaction to news apparent suicide bombings on the Moscow subway had left dozens dead, focusing instead on economic data, said Boris Schlossberg, director of currency research at GFT. Read about the Moscow bombings. The British pound (CUR_GBPUSD 1.4982, +0.0020, +0.1357%) rose 0.6% to $1.4994, boosted in part by stronger-than-expected consumer lending data, Schlossberg said. Read about U.K. lending. The dollar (CUR_USDYEN 92.5800, +0.1500, +0.1623%) bought 92.56 Japanese yen, compared to 92.52 yen late Friday.

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