Poland's zloty resilient in wake of fatal plane crash By William L. Watts, MarketWatch LONDON (MarketWatch) -- Investors regained appetite for risk Monday, pressuring the dollar and contributing to a sharp rebound in the euro as European leaders over the weekend finally provided long-sought details of a standby rescue package of loans for debt-burdened Greece. "The big, fat bailout plan for Greece should spark a further wave of risk-taking across the board to the detriment of the U.S. dollar," wrote strategists at UniCredit Bank in Milan. "The euro should easily outperform the other FX majors. The light data calendar should also favor the short-squeeze further." The dollar index (DXY 80.66, +0.26, +0.33%) , which measures the greenback against a trade-weighted basket of six major currencies, fell to 80.582 from 80.992 late Friday. The euro (CUR_EURUSD 1.3578, -0.0047, -0.3450%) surged as high as $1.3691 but backed off early highs to change hands in recent action at $1.3579, up from $1.3480 in late North American trading on Friday. The euro (CUR_EURYEN 126.7600, -0.0500, -0.0394%) rose to 126.85 Japanese yen, up 0.9%. The dollar (CUR_USDYEN 93.3400, +0.2500, +0.2686%) also rose, climbing to 93.41 yen from 93.24 yen late Friday. The British pound (CUR_GBPUSD 1.5377, -0.0073, -0.4744%) gained to trade at $1.5395, up from $1.5366 late Friday. The euro moved up on sterling to change hands at 88.12 pence. Euro-zone leaders agreed in a conference call Sunday to provide as much as 30 billion euros ($40.3 billion) in country-to-country loans to Greece. The rates would be at around 5% for a three-year loan, higher than the International Monetary Fund's lending rate but well below the current market rate, which still stands above 6.5%. Read about the Greek rescue plan. The IMF could add another 15 billion euros under the agreement. Uncertainty about the rate and scope of the plan had put added pressure on the euro last week while sending Greek government bond yields soaring. Fitch Ratings on Friday dropped Greece's credit two notches, citing in part worries about Greece's soaring borrowing costs. Strategists said the size of the package exceeded expectations and should soothe fears of a near-term default on Greek government debt -- but they were quick to caution that strains on the euro were unlikely to disappear. "There is still the question of whether the E.U. is just kicking the Greece problem down the road," wrote Gary Jenkins, head of fixed-income research at Evolution Securities, in a research note. There likely will "still be questions in the market as to the real resolve and commitment of the E.U. if the Greek economy continues to deteriorate more than expected," he added. The UniCredit strategists said the euro, having broken through key resistance at $1.3660, is likely to rebound to a range bounded by $1.3725 to $1.3775 before finding some stability. Meanwhile, Poland's zloty stood out among emerging-market currencies, gaining on both the euro and the dollar. The currency more than held its ground after a weekend plane crash near Smolensk, Russia, in which Polish President Lech Kaczynski, central bank chief Slawomir Skrzypek and several dozen others died. Read Emerging Markets. The zloty rose 1.1% to trade at 2.8422 to the dollar. The currency also changed hands at 3.8663 euros, up 0.1%. "While the plane crash at Smolensk is undoubtedly a tragedy, the deaths of the president, the central-bank governor and numerous other dignitaries are unlikely to have any consequences for the zloty," wrote Ulrich Leuchtmann, foreign-exchange analyst at Commerzbank in Frankfurt. "The Polish National Bank will remain fully capable of action and stick to its course." The central bank's stance became clear on April 9, when it intervened in the foreign-exchange market to temper the zloty's persistent strength, Leuchtmann said.

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