World stocks inched close to 18-month highs on Wednesday on signs of improving global growth but the euro remained on the ropes due to festering worries about Greece's debt problems.
Oil steadied near 18-month highs on the brightening economic outlook while copper prices pulled back from 20-month peaks as traders worried the metal's recent rally may have been overdone.
A recent run of strong U.S. data from jobs to manufacturing and service activity have fanned hopes the world's biggest economy was stirring again while the World Bank sahrply raised its forecasts for economic growth in East Asia, led by China.
Word stocks as measured by MSCI edged up 0.1 percent, near their highest since early October 2008 but gains were capped as European stocks slipped on caution before euro zone gross domestic product data due later in the session.
"The rebound in the United States is well supported by a strong economic recovery, but it's more complicated in Europe and the recent gains remain fragile," said Christian Jimenez, fund manager and president of Diamant Bleu Gestion in Paris.
The FTSEurofirst 300 index of top European shares shed 0.2 percent after hitting an 18-month high for a second session in a row on Tuesday.
The European benchmark is up 5.3 percent so far this year.
FISCAL WORRIES
The euro took another knock from worries around Greece's fiscal problems. The common currency was soft at $1.3383, within sight of an 11-month trough of $1.3265 hit late in March.
Euro-denominated gold prices rose to a record high 851.86 euros an ounce on strong physical demand spurred by fears over the outlook for the euro.
"Renewed uncertainty over Greece is hurting an already jittery euro," said Stuart Bennett, senior FX strategist at Credit Agricole. "Even though the market is already heavily short of euro, there is still downside risk." Hourly charts show if the euro breaches $1.3342, which marks the 76.4 percent retracement level of its ascent from $1.3265 to $1.3591, it may force it to retest levels around $1.3260.
The latest wave of selling was set off by reports that Greece wanted to amend an EU-IMF safety net deal set up late last month to help pay for its debts in an emergency.
Although Greece denied the reports, the market paid no heed and continued to bet on Athens having troubles cutting its debt burden, even as its borrowing costs mount.
Investors demanded a yield around seven percent for buying 10-year Greek bonds. That is almost 100 basis points above levels seen last week, and nearly 400 basis points above German benchmark 10-year Bunds.
The Greek/German bond yield gap expanded to more than 400 bps on Tuesday, its widest since Greece joined the euro in 2001.
