Euro roiled by Greece rescue reports, Asia shares edge up

The euro traded at a four-week high versus the dollar on Wednesday, buoyed by hopes for a fresh bailout package for debt-laden Greece, while Asian stocks edged higher after manufacturing data from China was largely in line with expectations.
European stocks were steady in early trade as investors awaited key U.S. jobs data for further clues on the health of the world's biggest economy, which has seen a spate of weak data in recent weeks.
Earlier in the day, the euro was knocked by a report in German newspaper the Frankfurter Allgemeine Zeitung which said the IMF will not pay its share of an aid tranche to Greece at the end of June, a market move which showed the currency's extreme sensitivity to any new Greek rescue plan.
But the single currency later rebounded to $1.4448, boosted in part by a report in Greek newspaper Kathimerini that the European Union, International Monetary Fund and European Central Bank are expected to finalise a second financial aid package for Greece in the coming days.
If a deal is signed soon, it could give the euro impetus to climb, traders said.
"Our view is that Greece will get another package – perhaps with some token 'voluntary' lengthening of maturities but not significant enough to really damage private investors – and so the euro should rebound over the coming few weeks," said Rob Ryan, a FX strategist at BNP Paribas in Singapore.
The dollar was hobbled by more weak U.S. economic data on Tuesday, dipping 0.1% against the yen to 81.26 yen and easing 0.3% against a basket of major currencies .
Japan's Nikkei share index closed 0.3% higher despite a bout of early profit-taking following Tuesday's boost from positive industrial and manufacturing activity data. Asian stocks outside of Japan rose 0.4%, led by by resources shares as oil and metal prices rebounded overnight.
With debt problems in peripheral euro zone countries deepening and signs of a slowdown in the global economy, investors reduced their exposure to stocks in May for the fourth month in a row, Reuters polls showed. At their most pessimistic since the third quarter of 2010, investors moved out of shares and into bonds and cash, according to the surveys.
Year-to-date gains in world stocks, measured by MSCI , have shrunk to around 5% from nearly 9% earlier this year, and a key question for markets is whether investors exit more risky positions before the end of the Federal Reserve's $600 bln Treasury purchase programme (QE2) in June.
"Investors now see a slowdown in goods production as virtually guaranteeing a soft patch for overall US economic growth," Societe Generale said in a research note, suggesting weakness will linger in the United States.
Markets were largely unfazed by surveys showing Chinese factory growth is slowing under the weight of government credit curbs and power shortages, echoing reports from Europe and the United States showing those economies are growing more sluggish.
Chinese factory growth slowed to at least nine-month lows in May as the rate of new orders cooled off, two PMI surveys showed on Wednesday.
Though the easing was in line with market expectations, and manufacturing activity continued to expand, the softening in orders could flag further economic weakness ahead and weaker demand for riskier assets such as equities and commodities.
Gold fell around $3 to $1,532.90 per ounce by 0725 GMT. Gold, one of the chief beneficiaries of investors move to safe-havens in times of extreme volatility, set a record high of $1,575.79 per ounce in early May.
Brent crude oil for July delivery was up 5 cents at $116.78 a barrel, having recovered from its fall below $115 earlier this week.