* Euro up 0.2 percent at $1.3637 <EUR=>
* Greek cabinet unveils 4.8 bln euro austerity plan
* Market waiting to see if Greek plan garners EU support
* Dollar slips before payrolls, hits lowest vs yen since Dec
(Releads, adds quote, updates prices)
By Tamawa Desai
LONDON, March 3 (Reuters) - The euro rose on Wednesday after
the Greek government endorsed a 4.8 billion euro austerity
package, but markets were wary over whether it would be enough
for Athens to win financial support from its European partners.
The euro rose roughly half a U.S. cent after a government
source told Reuters the Greek cabinet decided on the plan, which
included a rise in value added tax to 21 percent and a cut in
public sector salary bonuses by 30 percent. []
Market reaction was limited after an official announcement
disclosed more details of the plan [].
While sentiment remained fragile, "there would appear an
increasing chance that in the coming days developments in Greece
and the euro zone will help stabilise confidence and lift the
euro from oversold levels," said Derek Halpenny, European head
of global currency research at Bank of Tokyo-Mitsubishi UFJ.
Greek bond yield spreads also narrowed on the news.
But the euro's gains were limited ahead of a key meeting
between the Greek and German leaders scheduled for Friday.
"The importance of today's announcement stems from the
implications it has on the meeting," said Halpenny. "Approval by
Germany of today's fiscal announcement would imply financial
support for Greece if needed."
At 1214 GMT, the euro was 0.2 percent higher on the day at
$1.3637 <EUR=>. Stop-losses were seen at $1.3680 with a
technical target at $1.3693, traders said.
On Tuesday, the euro fell as low as $1.3432, its weakest
since mid-May 2009. Greece's fiscal crisis has helped drive the
euro down nearly 10 percent against the dollar since December.
For a package of graphics on the euro zone debt crisis,
click
http://r.reuters.com/fyw72j
The market was also keenly eyeing the fate of a sale of
10-year Greek government bonds expected soon.
"The sale will be the big test for the euro," said Antje
Praefcke, currency strategist at Commerzbank in Frankfurt.
Sterling edged higher against the dollar <GBP=>, boosted by
higher-than-expected services activity data, further bouncing
back from a 10-month low hit on Monday.
ECB, U.S. JOBS EYED
Concerns over debt in the euro zone were likely to keep
interest rates low, and no change is expected at a European
Central Bank policy meeting on Thursday.
"The medium-term implications of such aggressive fiscal
austerity measures in Greece and in many other peripheral
countries will keep inflation very low in the euro zone and
curtail ECB action well into 2011," BTM's Halpenny said.
All economists polled in a Reuters survey expected the ECB
to hold interest rates at a record low 1.0 percent.
The dollar slipped across the board as traders trimmed long
positions in the U.S. currency, which last week had built up to
their highest levels since September 2008.
The dollar <JPY=> fell to 88.47 yen in Asian trade,
according to trading platform EBS, its lowest since December.
The dollar index fell 0.3 percent to 80.238 <.DXY>.
Traders refrained from taking on big positions before the
U.S. non-farm payrolls report due on Friday.
Investors awaited U.S. ADP employment report at 1315 GMT,
which is forecast to show 20,000 jobs were lost in February
versus a loss of 22,000 in January.
(Additional reporting by Naomi Tajitsu; Editing by Nigel
Stephenson)
