* Euro pares gains; Greece passes first austerity vote
* Sentiment towards euro fragile given long-term concern
* Greece to vote Thursday on details of austerity measures (Updates prices, adds comment, details, changes byline, dateline, previous LONDON)
By Wanfeng Zhou
NEW YORK, June 29 (Reuters) - The euro rose against the dollar on Wednesday after Greece's parliament approved austerity measures needed to avoid a default, though concern over whether the government can implement them could limit gains.
Greek Prime Minister George Papandreou won a parliamentary majority in favor of a five-year austerity plan on Wednesday, clearing a major hurdle in debt-strapped Greece's bid to win access to international funding. For more see [ID:nLDE75S16H].
The euro last traded at $1.4385, still up 0.1 percent on the day but off a two-week high of $1.4449
"The immediate reaction to the news seems to be a little bit of 'buy the rumor, sell the fact' type of reaction," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.
"To some extent, investors have realized that this doesn't necessarily change the bigger picture for Greece or the euro zone. There are still a lot of questions about the effective implementation of austerity measures given the backdrop of increasing public anger in Greece."
Greece's government must now win approval on Thursday for legislation detailing specific implementation measures for the 28-billion-euro austerity package.
The European Union and International Monetary Fund have insisted Greece pass both Wednesday's 28-billion-euro austerity law and Thursday's specific legislation to implement it before disbursing the next 12-billion-euro tranche of Greece's bailout program the country needs to avoid bankruptcy next month.
The dollar fell to a session low against the yen after the news, last trading at 80.65 yen, down 0.6 percent on the day. It had fallen as low as 80.54 yen
Wariness about the outlook for the euro remained evident in the options market, with risk reversals continuing to show strong demand for bets on euro weakness against the dollar.
The 25-delta euro/dollar risk reversal
Maurice Pomery, managing director at Strategic Alpha, which advises banks and hedge funds on currencies, said global macro investors are likely to continue to be "extraordinarily wary of investing in the euro zone for a long time."
"Greece is still facing massive headwinds and this deal is really only buying time. The medium-term outlook for the euro will depend on whether the government can implement the measures." (Editing by James Dalgleish)