* Euro gains broadly on news of accord on Greece * Euro-zone leaders approve Greece safety net, includes IMF * Uncertainties remain; euro down 6.6 pct vs dlr in 2010 (Adds comments, updates prices)
By Vivianne Rodrigues
NEW YORK, March 26 (Reuters) - The euro rose broadly on Friday after euro-zone leaders agreed on a safety net for Greece, though uncertainties remained over the country's debt sustainability.
Euro-zone policy-makers agreed on an aid package under which Greece would receive both bilateral loans from euro-zone partners and funding from the International Monetary Fund if it faced severe difficulties.
But the plan did not alleviate longer-term worries about Greece and other fiscally vulnerable economies in the region, such as Portugal and Spain, limiting the euro's gains.
Analysts said the agreement is limited because it only offers funding as a last resort and only with unanimous euro- zone approval.
The package "reduces some of the biggest risks on Greece and we are obviously seeing the euro respond to that," said Daniel, Katzive, a director for global foreign exchange at Credit Suisse, in New York.
"But ultimately, the markets remain apprehensive over their fiscal situation and it will be hard for the euro to gain real traction against the dollar in the short term," he said.
Greece is saddled with borrowing costs more than double those of Germany and must borrow some 16 billion euros ($21.3 billion) between April 20 and May 23 to refinance maturing debt.
In mid-morning trading in New York, the euro was up 0.9 percent against the dollar at $1.3402, recovering after trading as low as $1.3268, according to Reuters data.
The euro touched a session high at $1.3418 after Greece's central banker said the country is not likely to make use of the EU-IMF financial aid facility.
Around the same time, the Greek prime minister said the message to the markets is "stop the rumors, focus on facts" and the banking system is healthy, not under any threat.
In the United States, the dollar had a limited reaction to a government report showing the country's economy grew at a slightly less brisk pace than previously estimated in the fourth quarter.
The dollar index, a measure of its performance against six other major currencies, fell 0.51 percent to 81.703.
The greenback fell 0.2 percent to 92.51 yen after touching its highest level against the Japanese currency since early January on Thursday at 92.96 yen.
Meanwhile, the euro advanced 0.8 percent to 124.08 yen.
LINGERING DOUBTS
Concerns about Greece's fiscal health have driven the euro down more than 6 percent versus the dollar this year, and despite the potential aid, the currency is likely to resume declines.
"This buys the euro a bit of time, but nothing fundamental has changed, and Greece still has to roll over its debt," said Michael Hewson, an analyst at CMC Markets, in London. Hewson said the previous support around $1.3480 had become a significant resistance level. A weekly close below here would "reinforce a downside trend in euro/dollar, potentially taking it down toward $1.3000," he said.
"It is unclear if the pressure on the euro is fully lifted in the near term," currency analysts at Scotia Capital said in a note. "This still leaves the euro with the stigma hanging over it that Eurozone countries were unwilling to keep the solution Euro area specific." (Additional reporting by Jessica Mortimer in London; Editing by Jan Pascchal)