* Euro rises vs dlr, Greek source details austerity plan
* Dlr slips across the board, hits weakest vs yen since Dec
* Planned Greek bond seen big test for euro
(Adds comment, details)
By Naomi Tajitsu
LONDON, March 3 (Reuters) - The euro rose against the dollaron Wednesday, hitting the day"s high as a Greek governmentsource cited details of fresh plans to tackle Greece"s debtproblems.
The euro EUR= rose roughly half a U.S. cent to around$1.3663 after a Greek government source told Reuters the Cabinetwould take extra austerity measures totalling 4.8 billion euros,the upper end of market expectations.
The European Union had been demanding that Athens find a wayto save an additional 4.8 billion euros in its budget. Theausterity plan also includes cuts to public sector bonuses andarise in VAT. [ID:nATH005244]
The report pulled the euro away from a 9 1/2-month low hiton Tuesday, boosted by a rise in Greek government bond priceswhich narrowed the 10-year yield spread against German ones, butanalysts cautioned against premature optimism about the plans.
"The measures are largely positive as they are at the upperend of speculation ... so the euro is seeing a slight rally,"said Elsa Lignos, currency strategist at RBC.
But she added that it was too early to tell whether theplans were enough to convince Greece"s European Union partnersthat it can service its 300 billion euro mountain of debt.
"We"re waiting to hear what the European reaction is goingto be to the measures ... Although on the face of it themeasures are at the upper end of speculation we are stillcautious."
The Greek government is slated to officially announce theplans on Wednesday, before Prime Minister George Papandreoumeets German Chancellor Angela Merkel in Germany on Friday.
Greece"s fiscal crisis has battered the euro in past months,driving it down nearly 10 percent against the dollar sinceDecember, as it highlighted weakness in some euro zone countriesand raised questions about the bloc"s stability.
By 1022 GMT, the euro was 0.2 percent higher on the day at$1.3625, trimming some earlier gains. On Tuesday, it fell as lowas $1.3432, its weakest since mid-May 2009.
Against the yen, it was unchanged on the day at 120.85 yen,having pulled back from the day"s low around 120.62 yen afterthe reports about the Greek austerity plans trickled out.
Still, ongoing concerns about Greece kept the euro near aone-year low of 119.60 yen hit last week.
Analysts said support for the euro from Greece"sbelt-tightening plan could be limited as Athens still faced thehurdle of attracting demand for a 10-year debt sale expectedsoon as the country clamours for funds to refinance its debts.
"The sale will be the big test for the euro," said AntjePraefcke, currency strategist at Commerzbank in Frankfurt.
U.S. JOBS DATA AWAITED
The dollar JPY= fell as low as 88.47 yen in Asian tradeaccording to electronic trading platform EBS, hitting itsweakest since December, before pulling back to around 88.73 inthe European session.
The dollar slipped across the board as traders trimmed longpositions in the U.S. currency, which last week had built up totheir highest levels since September 2008.
Against a currency basket, the dollar .DXY was slightlylower on the day at 80.400.
Some analysts expected currencies to trade in fairly narrowranges as few traders would be keen to take on excessively bigpositions in the U.S. currency before the U.S. non-farm payrollsreport due on Friday.
Before that, investors awaited U.S. ADP employment report at1315 GMT, which is forecast to show 20,000 jobs were lost inFebruary versus a loss of 22,000 in January.
Some analysts said a weaker-than-expected reading maytrigger selling in the dollar.
(Editing by Toby Chopra)
Currencies
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